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Top managers of Carolina Flooring are alarmed by their operating losses. They are considering dropping the laminate flooring product line. Company accountants have prepared the following analysis to help make this decision: (Click the icon to view the analysis.) Total fixed costs will not change if the company stops selling laminate flooring, Read the requirements Decision: It is to conclude that dropping laminate flooring would add $24,000 to operating income. If the company discontinues the laminate flooring product line, it incur fixed expenses allocated to laminate flooring, Requirement 2. Assume that the company can avoid $25,000 of fixed expenses by discontinuing the laminate flooring product line (these costs are direct fixed costs of the laminate flooring product line). Prepare an incremental analysis to show whether the company should stop selling laminate flooring (Enter a *o* in an input field if there is no expected change as a result of discontinuing the laminate flooring in this scenario.) Incremental Analysis for Discontinuation Decision Total Contribution margin lost it laminate flooring product line is dropped Less: Fixed cost savings it laminate flooring product line is dropped Choose from any list or enter any number in the input fields and then continue to the next question. Total Top managers of Carolina Flooring are alarmed by their operating losses. They are considering dropping the laminate flooring product line. Company accountants have prepared the following analysis to help make this decision: (Click the icon to view the analysis.) Total fixed costs will not change if the company stops selling laminate fooring. Read the requirements. Incremental Analysis for Discontinuation Decision Contribution margin lost if laminate flooring product line is dropped Less: Fixed cost savings I laminate flooring product line is dropped Operating income if laminate flooring is dropped because, assuming $25,000 of fixed expenses attributable to the laminate flooring product line can be avoided, the loss of contribution margin the fixed cost savings Requirement 3. Now, assume that all of the fixed costs assigned to laminate flooring are direct fixed costs and can be avoided if the company stops selling laminate flooring. However, marketing has concluded that wood flooring sales would be adversely affected by discontinuing the laminate flooring line (retailers want to buy both from the same supplier). Wood flooring production and sales would declino 10%. What should the Decision: man Choose from any list or enter any number in the input fields and then continue to the next question Top managers of Carolina Flooring are alarmed by their operating losses. They are considering dropping the laminate flooring product line. Company accountants have prepared the following analysis to help make this decision: (Click the icon to view the analysis.) Total fixed costs will not change if the company stops selling laminate flooring Read the requirements Requirement 3. Now, assume that all of the fixed costs assigned to laminate flooring are direct fixed costs and can be avoided if the company stops seiling laminate flooring. However, marketing has concluded that wood flooring sales would be adversely affected by discontinuing the laminate flooring line (retailers want to buy both from the same supplier). Wood flooring production and sales would decline 10%. What should the company do? Prepare an incremental analysis, (Enter a "U" in an input field there is no expected change as a result of discontinuing the laminate flooring line in this scenario.) Incremental Analysis for Discontinuation Decision Total Laminate flooring contribution margin lost it taminate flooring product line is dropped Wood flooring contribution margin lost if laminate flooring product line is dropped Less: Fixed cost savings if laminate flooring product line is dropped Tif laminate flooring is drooped Choose from any list or enter any number in the input fields and then continue to the next question. Operating income Top managers of Carolina Flooring are alarmed by their operating losses. They are considering dropping the laminate flooring product line. Company accountants have prepared the following analysis to help make this decision: Click the icon to view the analysis.) Total fixed costs will not change if the company stops selling laminate flooring Read the requirements in this scenario.) Incremental Analysis for Discontinuation Decision Total Laminate flooring contribution margin lost if laminate flooring product line is dropped Wood flooring contribution margin lost if laminate flooring product line is dropped Less: Fixed cost savings it laminate flooring product line is dropped Operating income laminate flooring is dropped Decision becauso, assuming that all faced costs assigned to the laminate flooring product line can be avoided but that wood flooring production and sales would decline 10%, the loss of contribution margin the fixed cost savings. Choose from any list or enter any number in the input fields and then continue to the next question Data Table nag ng proc any dick ked the scel ate A B D 1 Carolina Flooring 2 Product Line Contribution Margin Income Statement 3 For the Year 4 Product lines Laminate 5 Wood flooring flooring Company Total 6 Sales revenue $ 301,000 $ 120,000 $ 421,000 7 Less: Variable expenses 156,000 78,000 234.000 8 Contribution margin $ 145,000 $ 42,000 $ 187,000 9 Less fixed expenses: 10 Manufacturing 78,000 51,000 129,000 flool Fixe ating poring on: oided thef gs. Print Done se fra Data Table TS O cou e ico osts Ruire A B D 1 Carolina Flooring Product Line Contribution Margin Income Statement mt 1. glan ing 2 3 4 For the Year ncre 5 mal 6 Sales revenue Product lines Laminate Wood flooring flooring Company Total $ 301.000 $ 120,000 $ 421,000 156,000 78,000 234,000 145,000 $ 42,000 $ 187,000 cost com $ 7 Less: Variable expenses 8 Contribution margin 9 Less fixed expenses: 10 Manufacturing 78,000 51,000 129,000 an Print Done
