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GreenCut Lawnmowers makes three models of push mower: the Standard, the Premium, and the Pro. Condensed income statement data related to the three models
GreenCut Lawnmowers makes three models of push mower: the Standard, the Premium, and the Pro. Condensed income statement data related to the three models are as follows: Standard Premium Sales $499,000 $320,000 Pro $450,000 Variable costs 68,000 69,000 72,000 Cont. margin 431,000 251,000 378,000 Fixed costs 245,000 264,000 271,000 Net income $186.000 $(13,000) $107,000 GreenCut is considering discontinuing the Premium mower; if it does so, 35% of the fixed costs previously allocated to the Premium will now be allocated to the Standard, while another 30% will be allocated to the Pro. Given these figures, what will happen if GreenCut stops manufacturing the Premium?
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1 Original Financial Data Standard Sales 499000 Premium Sales 320000 Pro Sales 450000 Standard Varia...Get Instant Access to Expert-Tailored Solutions
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