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CraneIndustries manufactures light fixtures for home, retail, and industrial customers. The retail line has been showing losses for several years, and management is considering dropping
CraneIndustries manufactures light fixtures for home, retail, and industrial customers. The retail line has been showing losses for several years, and management is considering dropping the line. Recent income statements have been very similar to the following information which was prepared for the most recent year: Home Retail Industrial Total Sales $550200 $320200 $830200 $1700600 Variable costs 357600 217700 680700 1256000 Contribution 192600 102500 149500 444600 margin Fixed costs 125200 130200 115200 370600 Operating income $67400 $(27700) $34300 $74000 Of the fixed costs, $315600 of it is common costs that have been allocated equally to each product line. What will total operating income be if Crane drops the retail line? O $101700 O $(3500) O $77500 O $26500
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