Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

19...CullumberIndustries manufactures light fixtures for home, retail, and industrial customers. The retail line has been showing losses for several years, and management is considering dropping

19...CullumberIndustries manufactures light fixtures for home, retail, and industrial customers. The retail line has been showing losses for several years, and management is considering dropping the line. Recent income statements have been very similar to the following information which was prepared for the most recent year:

Home Retail Industrial Total

Sales$551400$321400$831400$1704200

Variable costs359000 219100 682300 1260400

Contribution margin192400 102300 149100 443800

Fixed costs126400 131400 116400 374200

Operating income$66000 $(29100) $32700 $69600

Of the fixed costs, $319200of it is common costs that have been allocated equally to each product line. What will total operating income be ifCullumberdrops the retail line?

a..$22300

b...$(7700)

c..$77300

d...$98700

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fraud Examination

Authors: W. Steve Albrecht

6th Edition

1337619671, 978-1337619677

More Books

Students also viewed these Accounting questions

Question

How should a market be defined? Can you provide an example?

Answered: 1 week ago

Question

2. Develop a good and lasting relationship

Answered: 1 week ago

Question

1. Avoid conflicts in the relationship

Answered: 1 week ago