Question
Bramble Corporation has a division that manufactures childrens and ladies basketball shoes. If it eliminates manufacturing the ladies basketball shoes, $25,600 of fixed costs will
Bramble Corporation has a division that manufactures childrens and ladies basketball shoes. If it eliminates manufacturing the ladies basketball shoes, $25,600 of fixed costs will still remain. For the year, the ladies' basketball shoe line had sales of $324,000, variable costs of $252,000, and fixed expenses of $89,600. Prepare an analysis showing whether the company should eliminate the ladies basketball shoe line. (If an amount reduces the net income then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000). While alternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problem.)
Continue | Eliminate | Incremental revenue and cost saving | |||||
---|---|---|---|---|---|---|---|
select an item Net income / (loss)SalesVariable costsDirect labourFixed costsPurchase price | $enter a dollar amount | $enter a dollar amount | $enter a dollar amount | ||||
select an item Variable costsPurchase priceFixed costsSalesDirect labourNet income / (loss) | enter a dollar amount | enter a dollar amount | enter a dollar amount | ||||
select an item Variable costsSalesFixed costsNet income / (loss)Purchase priceDirect labour | enter a dollar amount | enter a dollar amount | enter a dollar amount | ||||
select a closing name for this statement Purchase priceDirect labourFixed costsNet income / (loss)Variable costsSales | $enter a total net income or loss amount | $enter a total net income or loss amount | $enter a total net income or loss amount |
Arian Corporation select an option shouldshould not eliminate the ladies' basketball shoes line. |
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