Kenmore Company manufactures two products. Both products have the same sales price, and the volume of...
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Kenmore Company manufactures two products. Both products have the same sales price, and the volume of sales is equivalent. However, due to the difference in production processes, Product A has higher variable costs and Product B has higher fixed costs. Management is considering dropping Product B because that product line has an operating loss. (Click the icon to view the income statement.) 9. 10. If fixed costs cannot be avoided, should Kenmore drop Product B? Why or why not? If 50% of Product B's fixed costs are avoidable, should Kenmore drop Product B? Why or why not? 9. If fixed costs cannot be avoided, should Kenmore drop Product B? Why or why not? (Use a minus sign or parentheses to enter a decrease in profits.) Expected decrease in revenue Expected decrease in total variable costs Expected increase/(decrease) in operating income i Data Table Kenmore Company Income Statement Month Ended June 30, 2018 - Enter any number in the edit fields and then click Check Answer. Total Product A Net Sales Revenue S 130,000 $ 65,000 $ Product B 65,000 118,250 59,250 59,000 Variable Costs Contribution Margin 11,750 5,750 6,000 21,000 2,100 18,900 Fixed Costs S (9,250) S 3,650 $ (12,900) Operating Income/(Loss) Print Done Kenmore Company manufactures two products. Both products have the same sales price, and the volume of sales is equivalent. However, due to the difference in production processes, Product A has higher variable costs and Product B has higher fixed costs. Management is considering dropping Product B because that product line has an operating loss. (Click the icon to view the income statement.) 9. 10. If fixed costs cannot be avoided, should Kenmore drop Product B? Why or why not? If 50% of Product B's fixed costs are avoidable, should Kenmore drop Product B? Why or why not? 9. If fixed costs cannot be avoided, should Kenmore drop Product B? Why or why not? (Use a minus sign or parentheses to enter a decrease in profits.) Expected decrease in revenue Expected decrease in total variable costs Expected increase/(decrease) in operating income i Data Table Kenmore Company Income Statement Month Ended June 30, 2018 - Enter any number in the edit fields and then click Check Answer. Total Product A Net Sales Revenue S 130,000 $ 65,000 $ Product B 65,000 118,250 59,250 59,000 Variable Costs Contribution Margin 11,750 5,750 6,000 21,000 2,100 18,900 Fixed Costs S (9,250) S 3,650 $ (12,900) Operating Income/(Loss) Print Done
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