Please see the sample question:

Example 3:

Keith Inc. has 4 product lines: sour cream, ice cream, yogurt, and butter. Demand of individual products is not affected by changes in other product lines. 30% of the fixed costs are direct, and the other 70% are allocated. Results of June follow:

Sour CreamIce CreamYogurtButterTotal

Units sold2,0005004002003,100

Revenue$10,000$20,000 $10,000 $20,000 $60,000

Variable departmental costs 6,00013,0004,2004,80028,000

Fixed costs5,0002,0003,0007,00017,000

Net income (loss)$ (1,000)$5,000 $2,800$8,200$15,000

Instructions

Make a incremental analysis of the effect of dropping the sour cream product line.