Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Brislin Company makes and sells two products, Olives and Popeyes. The income statement for the prior year, 2001, was as follows: Olives Popeyes Sales $16,000

Brislin Company makes and sells two products, Olives and Popeyes. The income statement for the prior year, 2001, was as follows:

Olives

Popeyes

Sales

$16,000

$24,000

Variable cost of goods sold

6,000

10,000

Manufacturing contribution margin

$10,000

$14,000

Fixed production

5,000

7,000

Variable selling and administration

2,000

5,000

Fixed selling and administration

1,000

3,000

Net income

$2,000

($1,000)

Brislin's fixed costs are unavoidable and are allocated to products on the basis of sales revenue. If Popeyes are dropped, sales of Olives are expected to increase by 40 percent next year. What is the best decision of the company?

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

Step: 3

blur-text-image

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

Corporate Financial Reporting And Analysis

Authors: S David Young, Jacob Cohen, Daniel A Bens

4th Edition

111949463X, 9781119494638

More Books

Students also viewed these Accounting questions

Question

.

Answered: 1 week ago