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Marigold Corp. produces three versions of baseball bats: wood, aluminum, and hard rubber. A condensed segmented income statement for a recent period follows: Wood Aluminum
Marigold Corp. produces three versions of baseball bats: wood, aluminum, and hard rubber. A condensed segmented income statement for a recent period follows:
Wood | Aluminum | Hard Rubber | Total | ||||
Sales | $560000 | $260000 | $70000 | $890000 | |||
Variable expenses | 390000 | 140000 | 58000 | 588000 | |||
Contribution margin | 170000 | 120000 | 12000 | 302000 | |||
Fixed expenses | 75000 | 35000 | 22000 | 132000 | |||
Net income (loss) | $95000 | $ 85000 | $(10000) | $170000 |
Assume all of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped?
a. $140000
b. $158000
c. $170000
d. $180000
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