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Q6 Trifecta Sports Manufacturer produces equipment for three sports: baseball, basketball, and golf. The accountants prepared a segmented contribution margin statement for the past year
Q6 Trifecta Sports Manufacturer produces equipment for three sports: baseball, basketball, and golf. The accountants prepared a segmented contribution margin statement for the past year based on the three types of products manufactured as shown below. The CEO is concerned with the basketball equipment segment as it has been showing a loss for the past few years, Trifecta Sports Manufacturer Segmented Contribution Margin Statement For the Year Ended December 31, 2019 Baseball Basketball Golf Revenue $500,000 $400,000 $200,000 Less: Variable Costs 350.000 300.000 80,000 Contribution Margin 150,000 100,000 120,000 Less: Fixed Costs 90,000 150,000 35.000 Income from Operations $60,000 $50,000) $85,000 Total $1,100,000 230.000 370,000 275.000 $95,000 Required Recommend whether Trifecta should keep or drop the basketball equipment product line based on the following independent scenarios: a) If the line is dropped, assume that all the fixed costs relating to the basketball equipment segment would remain with the company b) Assume thatall the fixed costs relating to the basketball segment would no longer be incurred by the company if the product line is dropped c) Only 30% of the freed costs relating to the basketball segment would remain with the company if the product line is dropped 17"C Mostly cl
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