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Incremental Profit
Incremental Profit
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(a)
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(b)
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(d)
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(e)
(f)
4) Added Profit per unit = Total Profit per unit Profit on Selling Price of $200
= (f) (b)
= $75 $50
=$25
-------------------(g)
5) Total Profit by Q/A = No of units Produced Annually x Total profit per unit
= (a) x (f)
= 15,000 x $75
= $1,125,000
-------------------(h)
As Given, Fixed Selling Expenses to Q/A is $100,000 per year -----------------6) Net profit by Q/A = Total profit Fixed Selling Expenses
= (h) (i)
= $1,125,000 - $100,000
= $1,025,000.
-------------------7) Hence, Incremental Profit =
= (j) - (c)
=$1,025,000 - $750,000
= $275,000
(j)
(i)