19...CullumberIndustries manufactures light fixtures for home, retail, and industrial customers. The retail line has been showing losses
Question:
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