Question
Rings Company has three product lines, A, B, and C. The following financial information is available: Item Product Line A Product Line B Product Line
Rings Company has three product lines, A, B, and C. The following financial information is available:
Item Product Line A Product Line B Product Line C Sales $ 52,000 $ 100,000 $ 23,000 Variable costs $ 31,200 $ 53,000 $ 14,375 Contribution margin $ 20,800 $ 47,000 $ 8,625 Fixed costs: Avoidable $ 5,400 $ 14,500 $ 6,300 Unavoidable $ 4,100 $ 10,000 $ 3,100 Pre-tax operating income $ 11,300 $ 22,500 $ (775)
If Product Line C is discontinued and the manufacturing space formerly devoted to this line is rented for $6,000 per year, pre-tax operating income for the company will likely:
Rings Company has three product lines, A, B, and C. The following financial information is available:
| Item | Product Line A | Product Line B | Product Line C |
|---|---|---|---|
| Sales | $ 52,000 | $ 100,000 | $ 23,000 |
| Variable costs | $ 31,200 | $ 53,000 | $ 14,375 |
| Contribution margin | $ 20,800 | $ 47,000 | $ 8,625 |
| Fixed costs: | |||
| Avoidable | $ 5,400 | $ 14,500 | $ 6,300 |
| Unavoidable | $ 4,100 | $ 10,000 | $ 3,100 |
| Pre-tax operating income | $ 11,300 | $ 22,500 | $ (775) |
If Product Line C is discontinued and the manufacturing space formerly devoted to this line is rented for $6,000 per year, pre-tax operating income for the company will likely:
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Essentials Of Internal Auditing For Certified Internal Auditor CIA Exam Part One Review Notes 2023
Authors: Staff At SKDEMY
1st Edition
0645811831, 978-0645811834
