M7-7 (Algo) Analyzing Keep-or-Drop Decision [LO 7-2, 7-5] Blowing Sand Company produces the Drafty model fon, which currently has a net loss of $63,000 as follows: Sales revenue Less: Variable costs Contribution margin Less: Direct Fixed costs Segment margin Less: Common fixed costs Net operating income (loss) Drafty Mode $200,000 140,000 $ 60,000 45,000 $ 15,000 78,000 $763, 000) Eliminating the Drafty product line would eliminate $45,000 of direct fixed costs. The $78.000 of common fixed costs would be redistributed to Blowing Sand's remaining product lines Will Blowing Sand's net operating income increase or decrease if the Drafty model is eliminated? By how much? Total Proft by M7-7 (Algo) Analyzing Keep-or-Drop Decision [LO 7-2, 7-5] Blowing Sand Company produces the Drafty model fon, which currently has a net loss of $63,000 as follows: Sales revenue Less: Variable costs Contribution margin Less: Direct Fixed costs Segment margin Less: Common fixed costs Net operating income (loss) Drafty Mode $200,000 140,000 $ 60,000 45,000 $ 15,000 78,000 $763, 000) Eliminating the Drafty product line would eliminate $45,000 of direct fixed costs. The $78.000 of common fixed costs would be redistributed to Blowing Sand's remaining product lines Will Blowing Sand's net operating income increase or decrease if the Drafty model is eliminated? By how much? Total Proft by