Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Fruit Pie Inc. has three product lines-Strawberry, Cherry, and Apple. The following information is available: Strawberry Cherry Apple Sales revenue $80,000 $50,000 $31,000 Variable

image text in transcribed

Fruit Pie Inc. has three product lines-Strawberry, Cherry, and Apple. The following information is available: Strawberry Cherry Apple Sales revenue $80,000 $50,000 $31,000 Variable costs (30,000) (10,000) (10,000) Contribution margin $50,000 $40,000 $21,000 Fixed costs (20,000) (15,000) (25,000) Operating income (loss) $30,000 $25,000 $(4000) The company is deciding whether to drop product line Apple because it has an operating loss. Assuming fixed costs are unavoidable, if Fruit Pie Inc. drops product line Apple and rents the space formerly used to produce product Apple for $17,000 per year, total operating income will be O $47,000 O $25,000 $10,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

1st edition

978-0133251579, 133251578, 013216230X, 978-0134102313, 134102312, 978-0132162302

More Books

Students also viewed these Accounting questions

Question

1. Follow directions the first time.

Answered: 1 week ago