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Ivanhoe Trivia Co. manufactures and sells two trivia products, the Square Trivia Game and the Round Trivia Game. Last quarter's operating profits, by product, and
Ivanhoe Trivia Co. manufactures and sells two trivia products, the Square Trivia Game and the Round Trivia Game. Last quarter's operating profits, by product, and for the company as a whole, were as follows:
Square | Round | Total | ||||||
Sales revenue | $ 12,800 | $ 6,670 | $ 19,470 | |||||
Variable expenses | 4,980 | 2,930 | 7,910 | |||||
Contribution margin | 7,820 | 3,740 | 11,560 | |||||
Fixed expenses | 2,810 | 4,200 | 7,010 | |||||
Operating income | $ 5,010 | $( 460) | $ 4,550 |
Forty percent of the Round Game's fixed costs could have been avoided if the game had not been produced or sold. If the Round Game had been discontinued before the last quarter, what would operating income have been for the company as a whole?
Operating income without round |
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