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Need help with (a) please. Capital Toys' management is considering eliminating product A, which has been showing a loss for several years. The company's annual
Need help with (a) please.
Capital Toys' management is considering eliminating product A, which has been showing a loss for several years. The company's annual income statement, is as follows: B Total Sales $ 2.200,000 $ 1.400.000 $ 1,800,000 $5,400,000 1,650,000 600,000 1,080,000 3,330,000 $ 550,000 $ 800,000 $ 720,000 $ 2,070,000 $ 1,495,000 $ 500,000 $475,000 $ 520,000 Variable expenses Contribution margin Advertising expense Depreciation expense Corporate expenses Total fixed expenses Operating income 15,000 10,000 20,000 45,000 90,000 80,000 105,000 275,000 $ 565,000 $ 645,000 $ 1,815,000 $ 605,000 $(55,000) $ 235,000 $ 75,000 $ 255,000 Advertising expense - Specific to each product. Depreciation expense - Specific to each product: no other use available, no resale value. Corporate expenses - Allocated based on number of employees. (a) Restate the income statement in segment margin format. A B c $ $ Advertising Common food expenses Contribution margin Depreciation Direct fixed expenses Operating profit Sales Revenue Segment margin Variable expenses $ Step by Step Solution
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