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Nancy currently manages the polished chrome division of Coronado Broadway, a business that specializes in ceiling light fixtures. Its performance has been stable for the
Nancy currently manages the polished chrome division of Coronado Broadway, a business that specializes in ceiling light fixtures. Its performance has been stable for the past few years. However, the crystal division has been losing market share, while the rustic iron and chrome divisions have been growing. For the most part, executives feel that these changes are a result of customer preferences and current trends versus the quality or prices of their products. While they expect preferences to return to the crystal product line the next five years, a shortterm decision must be made now. Budgeted financial information for Coronado Broadway's upcoming fiscal year is presented below for each division. All fixed costs are currently assigned evenly to all divisions.
Chrome Crystal Iron
SALES $ $ $
Variable costs $ $ $
Contribution margin $ $ $
Fixed Costs $ $ $
Operating Income $ $ $
c If you were Nancy, would you try to sway the executives one way or the other in their decision to keep or drop the crystal product line? Would Nancy be betterworse off if they drop the Crystal product line and by how much.
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