Question

note: this type of decision is similar to dropping a product line.) nicholas company manufactures a fast-bonding glue, normally producing and selling 44,000 litres of the glue each month. this glue, which is known as mj-7, is used in the wood industry to manufacture plywood. the selling price of mj-7 is $30 per litre, variable costs are $18 per litre, fixed manufacturing overhead costs in the plant total $253,000 per month, and the fixed selling costs total $338,800 per month.

Answer 1

The question pertains to a business scenario where the profitability and decision to continue or discontinue a glue product called MJ-7 needs to be evaluated, using provided data on pricing and costs.

Step-by-step explanation:

The question concerns the area of business decision-making, specifically in the context of managerial accounting. It deals with the considerations involved in potentially discontinuing a product, in this case, a fast-bonding glue known as MJ-7.

The question provides detailed financial data including the selling price, variable costs, and fixed costs associated with the production and sale of the glue, which are crucial for analyzing the profitability of the product line and making a decision regarding its continuation.