Safari File Edit View History Bookmarks Window Help -ey , 51% L)- * :)) Tue Jun 19 7:07 PM Alex a ezto.mneducation.com Home - alamo.edu Chapter 7 Exercises 11.11 points Mohave Corp. is considering eliminating a product from its Sand Trap line of beach umbrellas. This collection is aimed at people who spend time on the beach or have an outdoor patio near the beach. Two products, the Indigo and Verde umbrellas, have impressive sales. However, sales for the Azul model have been dismal. Mohave's information related to the Sand Trap line is shown below. Segmented Income Statement for Mchave': Sand Trap Beach Umbrella Products VerdeAzu $80,000 $80,000 30,000 S150,000 34.000 31.000 26,000 91.00 $26,000 $29,000 4,000 59,000 Sales revenue Variable costs Contribution margin Less: Direct Fxed costs 900 2,5002,000 Segment margin $24,100 526,500 5 2,000 52600 Common fixed costs 17840 17,840 920 44,800 Net operating income (loes) Allocated based on total sales revenue Mohave has determined that eliminating the Azul model would cause sales of the Indigo and Verde madels to increase by 10 percent and 15 percent, respectively. Variable costs for these two models would increase proportionately. Although the direct foxed costs could be eliminated, the common fixed costs are unavoidable. The common fixed costs would be redistributed to the remaining two products Required: 1-a. Complete the table given bekw, if Mohave Corp drops the Azul line. (Do not round intermediate calculations. Round Common Fixed Costs to the nearest whole dollar.) Sales Reverue Variable Costs Contibution Margin Direct Fixed Costs Segment Magin Fixed Costs Net operating income 1-b. Will Mohave's net operating income increase or decrease if the Azul model is eliminated? By how much? in Net Operating Income (loss) by 19 popcorntime ap