Ch20 Q11/12

Crane has three product lines in its retail stores: kites, wind socks, and flags. Results of the fourth quarter are presented below: Units sold Revenue Variable departmental costs Direct fixed costs Allocated fixed costs Net income (loss) Kites 820 $18,040 13,940 820 6,560 $(3,280) Wind Socks 1,640 $32,800 18,040 2,460 6,560 $5,740 Flags If Crane discontinues the Kites product line, there will be a 1,640 9,840 $18,860 $69,700 1,640 6,560 $820 Total 4,100 V 41,820 4,920 19,680 The allocated fixed costs are unavoidable. Demand of individual products is not affected by changes in other product lines. What will happen to profits if Crane discontinues the Kites product line? $8,200 in profit by $

Crane has three product lines inits retail stores: kites, wind socks, and flags. Results of the fourth quarter are presented below: The allocated foced costs are unawoidable. Demand of individual products is not affected by changes in other product lines, What will happen to profits if Crane discontinues the Kites product line? If Crane discontinues the Kites product line, there will be a in profit by 5 an inety 5