Charles braved the economic challenges of a global pandemic and fulfilled a life-long dream of opening a boutique gluten-free bakery.  Since then, he has continued to develop his product lines to include muffins, tortes, and cookies.

Charles has just received the latest monthly income statement, shown below, and wonders if it is time to stop selling muffins and cookies, since those product lines are showing a loss. 

	Muffins	Tortes	Cookies	Total
Sales volume	80,000 boxes	50,000 tortes	30,000 boxes
Sales revenue	$2,400,000	$2,500,000	$420,000	$5,320,000
Cost of goods sold	1,680,000	1,350,000	330,000	3,360,000
Gross profit	720,000	1,150,000	90,000	1,960,000
Selling & Administrative Expense
Variable	400,000	200,000	60,000	660,000
Fixed	330,000	260,000	180,000	770,000
Total Selling & Administrative Expense	730,000	460,000	240,000	1,430,000
Operating income (loss)	$  (10,000)	$  690,000	$ (150,000)	$   530,000

 

Charles knows he needs additional information before he makes a decision to eliminate muffins and cookies, so he meets with his accountant, Claire, to learn more.  Claire provides him with the following unit costs for each of the three products so Charles can understand what is included in cost of goods sold.

	Muffins	Tortes	Cookies
Variable cost of goods sold	$17.00	$22.00	$8.00
Fixed cost of goods sold	4.00	5.00	3.00
Variable selling & administrative	5.00	4.00	2.00
Total unit cost	$26.00	$31.00	$13.00

 

Claire informs Charles that in developing the product costs, she has allocated $2.00 per unit in fixed cost of goods sold for manufacturing overhead costs that are incurred to support the entire kitchen area.  All other fixed costs are incurred to support individual product lines. She also confirms that $225,000 in corporate advertising costs that, because the ads feature all three products, have been allocated equally across the three product lines as part of fixed selling and administrative expenses. 

Calculate the segment margin for each of the three products.  ROUND YOUR ANSWERS TO WHOLE DOLLARS .  DO NOT INCLUDE A $ IN YOUR ANSWER.  INDICATE NEGATIVE NUMBERS WITH A "-" IN FRONT OF THE NUMBER.

Muffins: $Question Blank 1 of 6   Should Charles shut down the muffin line? 

Tortes:  $Question Blank 3 of 6         Should Charles shut down the torte line? 

Cookies:  $Question Blank 5 of 6   Should Charles shut down the cookie line?