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Production opprtunity cost:

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Production opprtunity cost;A' can manufacturing company produces and sells three different types of can: Version X, Y, and Z. A high-level, simplified profit/loss statement for the company is provided here. Corporate overhead(rent, general and administrative expenses, etc) is allocated equally among the three product versions. After reviwewing the statement, company managers are concerned about the loss on version Z and are considering ceasing production of that version. Should they do so? why or why not?;Version X Version Y Version Z Total;Net Can sales $180,000 $240,000 $105,000 $525,000;Variable Costs 105,000 135,000 82,500 322,500;Corporate OH 60,000 60,000 60,000 180,000;Contribution Profit15,000 45,000 37,500 22,500

 

Paper#30633 | Written in 18-Jul-2015

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