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please answer this managerial accounting question Question 3 -Keep or drop a segment Delicious Gourmet Chocolates has two product lines, milk chocolate bars and chocolate
please answer this managerial accounting question
Question 3 -Keep or drop a segment Delicious Gourmet Chocolates has two product lines, milk chocolate bars and chocolate covered almonds. The company is not doing as well as hoped as shown in the following income statement. 200,000 Variable Expenses 104,000 Fixed Expenses 90,000 Operating income (loss) -20,000 Additional information: Sales for chocolate bars and chocolate almonds are $80,000 and $120,000, respectively. The company focuses on using organic high quality almonds in this product line and thus variable expenses are 65% of sales. Since chocolate almonds is a newer product, the company has been advertising more aggressively. Thus, the traceable fixed costs for this product line are $30,000. Corporate fixed costs total $10,000. Required: a. What is the impact to operating income if the company were to drop the chocolate almonds product line? b. Should the company drop the product line Step by Step Solution
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