Fritz Furniture sells unfinished wood bookshelves. Recently, the firm contemplated switching to production of painted bookshelves, but it determined its net income per unit for the painted shelves would be $12 lower than that for the unpainted shelves. Shortly after reaching this conclusion, Fritz discovered that it overestimated its fixed production costs for the unfinished shelves by $15 and underestimated its variable production costs for the finished shelves by $10. If Fritz performs incremental analysis using the correct cost estimates, it will find that the net income per unit for the painted shelves is now $22 less than that for the unpainted shelves. the net income per unit for the painted shelves is now $3 greater than for the unpainted shelves. the net income per unit for the painted shelves is now $17 less than that for the unpainted shelves. the net income per unit for the painted shelves is now $13 greater than for the unpainted shelves.

Respuesta :

The net income per unit for the painted shelves is now $13 greater than for the unpainted shelves .

Option D is correct .

What happens if an unprofitable segment is eliminated?

Fixed expenses and costs allocated to the eliminated segment have to be absorbed by other segments.

Net profit :

Net profit per item or unit equals net profit for the period divided by the number of units sold. You can compare your net profit per item to the price for which you sell each item to determine how much of that selling price you keep at the end of the day.

What is income per unit?

Revenue per unit can be calculated by dividing total revenue by total units sold. The formula is: Average Revenue Per Unit = Total Revenue / Total Units Sold. This can be adjusted based on the business model

What is net margin per unit?

Net Profit Margin (also known as “Profit Margin” or “Net Profit Margin Ratio”) is a financial ratio used to calculate the percentage of profit a company produces from its total revenue. It measures the amount of net profit a company obtains per dollar of revenue gained

Learn more about Net income :

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