Mohave Corp. is considering eliminating a product from its Sand Trap line of beach umbrellas. This collection is aimed at people who spend time on the beach or have an outdoor patio near the beach. Two products, the Indigo and Verde umbrellas, have impressive sales. However, sales for the Azul model have been dismal. Mohave's information related to the Sand Trap line is shown below Sand Trap Beach Umbrella Products Allocated based on total sales revenue Mohave has determined that eliminating the Azul model would cause sales of the Indigo and Verde models to increase by 10 percent and 15 percent, respectively Variable costs for these two models would increase proportionately. Ailthough the direct fixed costs could be eliminated, the common fixed costs are unavoidable. The common fixed costs would be redistributed to the remaining two products. Required: 1-a. Complete the table given below, if Mohave Corp drops the Azull line. (Do not round intermediate calculations. Round Common Fixed Costs to the nearest whole dollar.) 1-b. Will Mohave's net operating income increase or decrease if the Azul model is eliminated? By how much? 2. Should Mohave drop the Azul model? 3-a. Complete the table given below assuming that Mohave had no direct fxed overhead in its production information and the entire $51000 of foed cost was common fixed cost The common fixed costs would be redistributed to the remaining two products Required: 1-a. Complete the table given below, i Mohave Corp drops the Azul line. (Do not round intermediate calculations. Round Common Fixed Costs to the nearest whole dollar.) 1-b. Will Mohave's net operating income increase or decrease if the Azul model is eliminated? By how much? 2. Should Mohave drop the Azul model? 3-a. Complete the table given below assuming that Mohave had no direct foed overhead in its production information and the entire $51000 of fixed cost was common flxed cost 3-b. Should it the drop Azul model? 3-C. What is the increase or decrease in the net operating income of Mohave? Mohave Corp. is considering eliminating a product from its Sand Trap line of beach umbrellas. This collection is aimed at people who spend time on the beach or have an outdoor patio near the beach. Two products, the Indigo and Verde umbrellas, have impressive sales. However, sales for the Azul model have been dismal. Mohave's information related to the Sand Trap line is shown below Sand Trap Beach Umbrella Products Allocated based on total sales revenue Mohave has determined that eliminating the Azul model would cause sales of the Indigo and Verde models to increase by 10 percent and 15 percent, respectively Variable costs for these two models would increase proportionately. Ailthough the direct fixed costs could be eliminated, the common fixed costs are unavoidable. The common fixed costs would be redistributed to the remaining two products. Required: 1-a. Complete the table given below, if Mohave Corp drops the Azull line. (Do not round intermediate calculations. Round Common Fixed Costs to the nearest whole dollar.) 1-b. Will Mohave's net operating income increase or decrease if the Azul model is eliminated? By how much? 2. Should Mohave drop the Azul model? 3-a. Complete the table given below assuming that Mohave had no direct fxed overhead in its production information and the entire $51000 of foed cost was common fixed cost The common fixed costs would be redistributed to the remaining two products Required: 1-a. Complete the table given below, i Mohave Corp drops the Azul line. (Do not round intermediate calculations. Round Common Fixed Costs to the nearest whole dollar.) 1-b. Will Mohave's net operating income increase or decrease if the Azul model is eliminated? By how much? 2. Should Mohave drop the Azul model? 3-a. Complete the table given below assuming that Mohave had no direct foed overhead in its production information and the entire $51000 of fixed cost was common flxed cost 3-b. Should it the drop Azul model? 3-C. What is the increase or decrease in the net operating income of Mohave
