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Results for January are listed below: Chinese Style American Style Jareness style Total Units sold 400 450 350 1,200 $93,500 Revenue $36,000 $22,500 $35,000 Variable
Results for January are listed below: Chinese Style American Style Jareness style Total Units sold 400 450 350 1,200 $93,500 Revenue $36,000 $22,500 $35,000 Variable departmental costs Avoidable fixed costs 14,000 6,000 8.000 $ 8.000 13,500 4,000 9.000 $4,000) 17,500 5,000 7.000 $ 5.500 45,000 15,000 24.000 $ 9.500 Unavoidable fixed costs Net income If American style is discontinued, management estimates that sales of Chinese Style will increase by 20%. In good form, prepare an incremental analysis to determine if American style should be discontinued. What qualitative factors should be considered relating question (a)? Should American style be discontinued based solely on quantitative aspects? Briefly justify your response. Without creating new income statements, and using your results from your analysis in part A, determine the amount of the company's new net income if American style is discontinued. Show your calculations
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