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It looks like Prof. Cainas is concerned about the performance of one of Lawn Corp's divisions, though she hasn't said exactly which one (classic Cainas!).
It looks like Prof. Cainas is concerned about the performance of one of Lawn Corp's divisions, though she hasn't said exactly which one (classic Cainas!). Look at the income statement below to find which division, Leaf Blowers or Lawn Mowers, is struggling Afterwards, find the effect on Net Income if the division is dropped, assuming 70% of Fixed costs can be avoided by dropping the division and fertilizer production can be expanded by 10% (by using space vacated by the struggling division) Lawn Corp Income Statement For the Year Ended 12/31/2019 Enter your answers here! Struggling Division: Keep or Drop: Difference Net Income: With All Divisions ithout Struggling Divison Revenues: 0.00 Fertilizers Leaf Blowers Lawn Mowers Total Revenues $54,870 $42,600 $45,640 $143,110 $0 S0 $0 Check Answer Expenses Next Problem Variable: Fertilizers Leaf Blowers Lawn Mowers -$27,600 $22,270 $29,090 $0 $0 $0 Fixed Costs: Fertilizers Leaf Blowers Lawn Mowers Total Expenses $13,070 $10,510 -$17,510 -$120,050 $0 $0 $0 $O Net Income $23,060 DifferencelNet Income $23,060.00
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