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Exhibit 6-5
Estrada Incorporated Produces Two Different Products with the Following

Question 34

Multiple Choice

Exhibit 6-5
Estrada Incorporated produces two different products with the following monthly data.
 Charcoal  Gas  Total  Barbecues  Barbecues  Selling price per unit $150$600 Variable cost per unit $60$360 Expected unit sales 1,4006002,000 Sales mix 70%30%100% Fixed costs $180,000\begin{array}{llcc}&\text { Charcoal } & \text { Gas } & \text { Total } \\&\text { Barbecues } & \text { Barbecues } &\\\text { Selling price per unit } & \$ 150 & \$ 600 & \\\text { Variable cost per unit } & \$ 60 & \$ 360 & \\\text { Expected unit sales } & 1,400 & 600 & 2,000 \\\text { Sales mix } & 70 \% & 30 \% & 100 \% \\\text { Fixed costs } & & & \$ 180,000\end{array}

-Refer to Exhibit 6-5.What would be the operating profit if the Charcoal Barbecue sales price increases 20 percent?


A) $185,600
B) $144,000
C) $132,000
D) $42,000
E) None of the answer choices is correct.

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