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Fido Company has three segments, one of which is unprofitable. The Duchess Doggy Biscuit segment had the following results last period: Sales $1,040,000 Variable expenses
Fido Company has three segments, one of which is unprofitable. The Duchess Doggy Biscuit segment had the following results last period:
Sales | $1,040,000 |
Variable expenses | (640,000) |
Contribution margin | 400,000 |
Fixed expenses | (540,000) |
Net loss | $(140,000) |
If the Duchess Doggy Biscuit segment is eliminated, 50% of the fixed expenses can also be eliminated, the other 50% will be reallocated. What will happen to company net income if this product line is eliminated?
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