Question
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 $25420 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.
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Managerial Accounting And Analysis In Multinational Enterprises
Authors: H. Peter Holzer, Hanns Martin W. Schoenfeld
1st Edition
0899250874, 978-0899250878
