1.)Charter Sports Equipment manufactures round, rectangular, and octagonal trampolines. Sales and expense data for the past month...

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1.) Charter Sports Equipment manufactures round, rectangular, and octagonal trampolines. Sales and expense data for the past month follow:

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Management is concerned about the continued losses shown by the round trampolines and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce the trampolines has no resale value. If the round trampoline model is dropped, the two line supervisors assigned to the model would be discharged.

Required:
1. What is the financial advantage (disadvantage) of discontinuing the round trampolines? The company has no other use for the capacity now being used to produce the round trampolines. Show computations to support your answer.
2. Recast the above data in a format that would be more useful to management in assessing the profitability of the various product lines.

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Related Book For  book-img-for-question

ISE Introduction To Managerial Accounting

ISBN: 9781260091755

8th Edition

Authors: Peter Brewer, Ray Garrison, Eric Noreen

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