Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Salty Pretzels Corporation has three product lines, Cinnamon, Chocolate, and Sea salt. The following information is available: Sales Cinnamon $100,000 76.000 $24,000 Chocolate Sea Salt
Salty Pretzels Corporation has three product lines, Cinnamon, Chocolate, and Sea salt. The following information is available: Sales Cinnamon $100,000 76.000 $24,000 Chocolate Sea Salt $90,000 $88,000 48,000 79,000 $42,000 $9,000 Variable costs Contribution margin Fixed costs: Avoidable Unavoidable Operating income 9,000 6,000 $9,000 18,000 9.000 $15,000 3,000 9.700 $(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
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started