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Pottery Unlimited has two product lines: cups and pitchers. Income statement data for the most recent year follow: Total Cups Pitchers Sales Revenue 460000 310000
Pottery Unlimited has two product lines: cups and pitchers. Income statement data for the most recent year follow:
Total | Cups | Pitchers | |
Sales Revenue | 460000 | 310000 | 150000 |
Variable Expenses | 355000 | 235000 | 120000 |
Contribution Margin | 105000 | 75000 | 30000 |
Fixed Expenses | 76000 | 38000 | 38000 |
Operating Income (loss) | 29000 | 37000 | (8000)
|
If $22364 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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