Question
5 17/20 Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow: Total Luxury Sporty
5 17/20
Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow:
| Total | Luxury | Sporty | |
| Sales revenue | $490,000 | $360,000 | $130,000 |
| Variable expenses | 355,000 | 235,000 | 120,000 |
| Contribution margin | 135,000 | 125,000 | 10,000 |
| Fixed expenses | 76,000 | 38,000 | 38,000 |
| Operating income (loss) | $59,000 | $87,000 | $(28,000) |
Assuming fixed costs remain unchanged, how would discontinuing the Sporty line affect operating income?
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Quality And GMP Auditing Clear And Simple
Authors: James L. Vesper
1st Edition
0367400901, 978-0367400903
