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nJoy Inc. manufactures three models of snowboards. Information on the three products is given below. Bunny Hill Blue Mountain Black Diamond Sales $ 500,000 $
nJoy Inc. manufactures three models of snowboards. Information on the three products is given below. Bunny Hill Blue Mountain Black Diamond Sales $ 500,000 $ 400,000 $ 100,000 Variable Expenses 275,000 260,000 85,000 Fixed Expenses Common 100,000 80,000 20,000 Fixed Expenses - Unique 15,000 7,500 5,000 Fixed expenses consist of $200,000 of common costs allocated to the three products based on relative sales, and additional unique fixed expenses of $15,000 (Bunny Hill), $7,500 (Blue Mountain), $5,000 (Black Diamond). The common costs will be incurred regardless of how many models are produced. The other xed expenses would be eliminated ifa model is phased out. Sean White, an executive with the company, feels the Black Diamond line should be discontinued to increase the company's net income. Instructions: Given the information above, answer the questions below. Be sure to show your work for partial credit. Round percent value to two decimal places. Round dollar amounts to the nearest dollar. 1. What is the total contribution margin nJoy Inc. produces with all three models? $_ 2. What is the contribution margin ratio for all three models combined? _ la? 3. What is the total net income may Inc. produces with all three models? $_ 4. How much of the common fixed expenses would be allocated to the Bunny Hill line if the Black Diamond line was eliminated? $7 5. What is the total net income may Inc. would produce if the Black Diamond line was eliminated? $_
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