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Hong Publishing has purchased Lang Publishing. After reviewing titles from both companies, a decision must be made to determine what titles must be dropped. The
Hong Publishing has purchased Lang Publishing. After reviewing titles from both companies, a decision must be made to determine what titles must be dropped. The following information is available to make the decision. Title x Title Y Title z 5101,000 50,000 $149,000 76,000 $199,000 100,000 Sales Variable Cost Contribution Margin Direct Fixed Cost Allocated Common Fixed Cost $51,000 $73,000 599,000 41,000 20.000 29,000 16,000 9,000 21,000 Net Income $22.000 $28,000 537,000 A. What is the total income if all titles were produced? B. If Title X was dropped, what would be the effect on Net Income? Loss C. How much did Title X Contribute to Fixed Costs? D. Determine the cost and the amount that will remain even if Title X is dropped. Allocated Fixed Cost E. Which costs and amount will be eliminated if Title X is dropped? Contribution Margin Direct Fixed Cost
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