Epicure Products Company reports the results for three lines as follows. Hypogeal Epigeal Aerie Total Company Sales $100.000 $120,000 $96.000 $316,000 Variable Costs 50,000 90,000 48,000 188,000 Contribution Margin 50,000 30,000 48.000 128,000 Fixed Costs 40.000 48,000 38.400 126,400 Operating Income $ 10,000 ($18,000) $ 9,600 $ 1.600 1. Mangement is considering dropping Epigeal product line to boost earnings. What would happen to earnings if the Epigeal product line were dropped? (Hint: no calculation is necessary.) 2. Now assume that 50% of any product line's fixed costs would be eliminated if that product line were eliminated, and sales of the other product lines would be increased by 10%. Would it be profitable to drop Epigeal? How much would operating income e een.... HorribleSubs - So b... DOUBLE DEGREE.... FL Edizioni Accademic... NUNK-IULM Dual De... Variable Costs 50,000 90,000 48.000 188.000 Contribution Margin 50,000 30,000 48,000 128,000 Fixed Costs 40.000 48.000 38.400 126,400 Operating Income $ 10,000 ($18,000) $ 9,600 $ 1,600 1. Mangement is considering dropping Epigeal product line to boost earnings. What would happen to earnings if the Epigeal product line were dropped? (Hint: no calculation is necessary.) 2. Now assume that 50% of any product line's fixed costs would be eliminated if that product line were eliminated, and sales of the other product lines would be increased by 10%. Would it be profitable to drop Epigeal? How much would operating income charge for the company? 3. Assuming your analysis indicated that it would increase income to drop Epigeal, what are some reasons you might want to keep it anyway? B TV Editor HTML A- IE 3 x x KU w