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need help with part b)? If Novak Broadway drops the crystal light fixtures line, it will save $158,000 in fixed costs (the dedicated manager's salary).
need help with part b)?
If Novak Broadway drops the crystal light fixtures line, it will save $158,000 in fixed costs (the dedicated manager's salary). In this case, will Novak be better or worse off financially if it drops the crystal product line? By how much? Novak would be by $ Debra earns a bonus set at 5% of her product line's actual operating income. How much is she currently expecting for her bonus? If sales in the chrome line and the iron line turn out as expected, how much will Debra's bonus be if the crystal line is dropped? Current expected bonus $ Bonus if the crystal line is dropped $ Debra currently manages the polished chrome division of Novak 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 in the next five years, a short-term decision must be made now. Budgeted financial information for Novak Broadway's upcoming fiscal year is presented below for each division. All fixed costs are currently assigned evenly to all divisionsStep by Step Solution
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