Cable paper company produces many colors of paper. The current popular color is grey. To increase the production of grey paper, a decision must be made to determine what color must be dropped. The following information is available to make the decision.

A. What is the total income if all colors were produced?

B. If Peach was dropped, what would be the effect on Net Income?

C. How much did Peach paper contribute to Fixed Costs?

D. Determine the cost and the amount that will remain even if Peach is dropped?

E. Which costs and amount will be eliminated if Peach is dropped?

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Sales Variable costs Contribution margin Direct fixed costs Allocated common fixed costs Net income Custom Embroidery $60,000 20,000 40,000 22,000 22,000 $(4,000) Logo Apparel $275,000 115,000 160,000 50,000 50,000 $ 60,000