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Dolls R Us sells three products in its retail stores: baby dolls, teenage dolls, and plush dolls. Results of the fourth quarter are below: Units
Dolls R Us sells three products in its retail stores: baby dolls, teenage dolls, and plush dolls. Results of the fourth quarter are below: Units sold Baby Dolls Teenage Dolls Plush Dolls 1,000 2,000 2,000 Total 5,000 Revenue $32.000 $43,000 $26,000 $101,000 Variable departmental costs 22,000 24,000 13,000 59,000 Direct fixed costs 5,000 4,000 3,000 12,000 Allocated fixed costs 6,000 7,000 7,000 20,000 Net income (loss) $(1,000) $8,000 $3,000 $10,000 Demand for individual products is not affected by changes in other product lines. Prepare an incremental analysis to determine if the Baby Dolls should be discontinued. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g (45)) Incremental revenue $ Variable cost savings Direct fixed cost savings Rise in profts if discontinued $ C V A
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