Question
Salty Pretzels Corporation has three product lines, Cinnamon, Chocolate, and Sea salt. The following information is available: Cinnamon Chocolate Sea Salt Sales $100,000 $90,000
Salty Pretzels Corporation has three product lines, Cinnamon, Chocolate, and Sea salt. The following information is available: Cinnamon Chocolate Sea Salt Sales $100,000 $90,000 $88,000 76,000 $24,000 Variable costs 48,000 79,000 Contribution margin $42,000 $9,000 Fixed costs: 9,000 6,000 $9,000 Avoidable 18,000 3,000 Unavoidable 9,000 9,700 Operating income $15,000 $(3,700) Requirements: b. If the Sea salt product line is discontinued and the space formerly used to produce the Sea salt product line is rented for $15,000 per year, will the operating income increase or decrease and by how much? Show your calculations.
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Fundamental financial accounting concepts
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward
8th edition
978-007802536, 9780077648831, 0078025362, 77648838, 978-0078025365
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