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C. Bucket Inc. manufacturers three products: pajamas, slippers and robes. It is considering eliminating robes because the product line is unprofitable. The company's most recent
C. Bucket Inc. manufacturers three products: pajamas, slippers and robes. It is considering eliminating robes because the product line is unprofitable. The company's most recent contribution margin format income statement is as follows: C. Bucket Inc. Contribution Margin Income Statement Total (Company) Pajamas Robes Slippers Sales Revenue $860,000 $340,000 $220,000 $300,000 Less: Variable Costs 590,000 220,000 190,000 180,000 Contribution Margin 270,000 120,000 30,000 120,000 Less: Fixed Costs 140,000 40,000 50,000 50,000 Net Operating Income $130,000 $80,000 ($20,000) $70,000 If C. Bucket Inc. eliminates Robes, $25,000 of its fixed costs will not be eliminated. Compute the change in C. Bucket's net income if Robes is eliminated. (Enter a decrease as a negative number; use a negative sign, not parentheses)
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