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BlossomManufacturing makes single kayaks, double kayaks, and lightweight competitive kayaks. The double kayak line has been showing losses for several years, and management is considering
BlossomManufacturing makes single kayaks, double kayaks, and lightweight competitive kayaks. The double kayak 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: Single Double Competitive Total Sales $688700 $401100 $1038600 $2128400 Variable costs 447900 273200 852100 1573200 Contribution margin 240800 127900 186500 555200 Fixed costs 157300 163600 144800 465700 Operating income $83500 $(35700) $41700 $89500 Of the fixed costs, $397350 is common costs that have been allocated equally to each product line. What will total operating income be if Brown drops the double kayak line? O $29950 O $125200 O $(7250) O $96750 C
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