(Answered) Question - the officers of bradshaw company are reviewing

Accounting

Question - The officers of Bradshaw Company are reviewing the profitability of the company's four products and the potential effect of several proposals for varying the product mix. An excerpt from the income statement and other data follow:

Particulars	Total	Product
Particulars	Total	P	Q	R	S
Sales	$ 62,600	$ 10,000	$ 18,000	$ 12,600	$ 22,000
Cost of goods sold	44,247	4,750	7,056	13,968	18,500
Gross profit	18,326	5,250	10,944	(1,368)	3,500
Operating expenses	12,012	1,990	2,976	2,826	4,220
Income before income taxes	6,314	3,260	7,968	(4,194)	(720)
Units sold		1,000	1,200	1,800	2,000
Sales price per unit		10.00	15.00	7.00	11.00
Per unit Variable cost of goods sold		2.50	3.00	6.50	6.00
Per unit Variable operating expenses per unit		1.17	1.25	1.00	1.20

1. What is the effect on the company's income if Product R is discontinued (increase/decrease in dollars)?

2. What is the effect on the company's income if the sales price of Product R is increased to $8 per unity with a decrease in the number o units sold to 1500 (increase/decrease in dollars)?

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