Summer Company Makes Three Types of Products What Is the Operating Profit (Loss)for All Three Products for Types

question 81

Multiple Choice

Summer Company makes three types of products.The company has two types of customers.The cost to serve all customers is $12,000 and is allocated to customer types based on the number of manager visits to customer locations.The following data are available:
$\begin{array}{llll}&\text { Product } 1&\text { Product } 2&\text { Product } 3\\\text { Sales } & \$ 5,000 & \$ 6,000 & \$ 30,000 \\\text { Cost of goods sold } & \underline{4,000} & \underline{4,800} & \underline{15,000} \\\text { Gross margin }&\$1,000&\$1,200&\$15,000\end{array}$
$\begin{array}{lll}&\text { Customer type }1&\text { Customer type }2\\\text { Product 1 Sales } & \$ 500 & \$ 4,500 \\\text { Product 2 Sales } & \$ 1,000 & \$ 5,000 \\\text { Product 3 Sales } & \$ 16,000 & \$ 14,000 \\\text { Manager visits } & 4 & 16\end{array}$
What is the operating profit (loss) for all three products for Customer Type 2?

• A) $(700)
• B) $(2,600)
• C) $8,450
• D) $9,600

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Definitions:

Operating System

The software that manages all hardware and other software on a computer, allowing it to perform basic functions and run applications.

Start Menu

A graphical user interface element that provides a centralized place for accessing applications, files, and settings on a computer.

File Name

The designated name given to a file, used to uniquely identify it within a file system.

Executable File

A type of computer file that, when opened, runs or executes a set of instructions contained within it, typically to run a program or application.