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Fishing Ski Guard Golf Guard Total Guard $ 931,000 $267,200 $ 407,eee $ 257,000 468,000 116.000 197,880 155,000 463,000 151,000 210,000 102,000 Sales Variable manufacturing
Fishing Ski Guard Golf Guard Total Guard $ 931,000 $267,200 $ 407,eee $ 257,000 468,000 116.000 197,880 155,000 463,000 151,000 210,000 102,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses Total fixed expenses Net operating income (loss) 69. 108 8,3ee 40,400 20,480 43,4be 20,600 7,100 15,700 113,700 40,280 38,200 35.300 186,200 53.400 81,4ee 51,400 412,400 122,500 167, 10e 122,800 $ 58,600 $ 28,500 $ 42,900 $(20,880) "Allocated on the basis of sales dollars. Management is concerned about the continued losses shown by the fishing guards and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce fishing guards has no resale value and does not wear out. Required: 1. What is the financial advantage (disadvantage) per quarter of discontinuing the fishing guard model? 2. Should the production and sale of fishing guards be discontinued? 3. Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-run profitability of the various product lines Required 1 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the fishing guards? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Should the production and sale of fishing guards be discontinued? Yes ONO Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long- run profitability of the various product lines. Totals Ski Guards Golf Guards Fishing Guards Contribution margin (105) Traceable fixed expenses: Total traceable fixed expenses Product line segment margin (loss) Not operating income (loss)
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