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Crane Inc. has 4 product lines: sour cream, ice cream, yogurt, and butter. Demand of individual products is not affected by changes in other product
Crane Inc. has 4 product lines: sour cream, ice cream, yogurt, and butter. Demand of individual products is not affected by changes in other product lines. 30% of the fixed costs are direct, and the other 70% are allocated. Results of June follow: Sour Cream Ice Cream Yogurt Butter Total Units sold 2,520 630 504 252 3,906 Revenue $12,600 $25,200 $12,600 $25,200 $75,600 Variable departmental costs 7,560 16,380 5,292 6,048 35,280 Fixed costs 6,300 2,520 3,780 8,820 21,420 Net income (loss) $(1,260) $6,300 $3,528 $10,332 $18,900 Prepare an incremental analysis of the effect of dropping the sour cream product line. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) $ $ Sour Cream Ice Cream Yogurt Butter Total Units sold 2,520 630 504 252 3,906 Revenue $12,600 $25,200 $12,600 $25,200 $75,600 Variable departmental costs 7,560 16,380 5,292 6,048 35,280 Fixed costs 6,300 2,520 3,780 8.820 21,420 Net income (loss) $(1,260) $6,300 $3,528 $10,332 $18,900 Prepare an incremental analysis of the effect of dropping the sour cream product line. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) $ Incremental fixed cost savings Incremental variable cost savings Incremental direct materials Incremental revenue Incremental direct labor Incremental decrease in profits if dropped $
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