Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pottery Unlimited has two product lines: cups and pitchers. Income statement data for the most recent year follow: Total Cups Pitchers Sales revenue $460,000 $310,000

Pottery Unlimited has two product lines: cups and pitchers. Income statement data for the most recent year follow:

Total

Cups

Pitchers

Sales revenue

$460,000

$310,000

$150,000

Variable expenses

355,000

235,000

120,000

Contribution margin

105,000

75,000

30,000

Fixed expenses

76,000

38,000

38,000

Operating income (loss)

$29,000

$37,000

$(8,000)

If $26469 in fixed costs will be eliminated by dropping the Pitcher line, how will operating income be affected? If income drops, use a negative sign in front of the number.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

IS Audit And Control For Accountants

Authors: Mr Amir Manzoor

1st Edition

1493665006, 978-1493665006

More Books

Students also viewed these Accounting questions