Question
Sandhill has three product lines in its retail stores: flipflops, sandals, and slippers. Results of the fourth quarter are presented below: Flipflops Sandals Slippers
Sandhill has three product lines in its retail stores: flipflops, sandals, and slippers. Results of the fourth quarter are presented below: Flipflops Sandals Slippers Total Units sold 980 1,960 1,960 4,900 Revenue $19,600 $39,200 $24,500 $83,300 Variable departmental costs 16,660 21,560 11,760 49,980 Direct fixed costs 980 2,940 1,960 5,880 Allocated fixed costs 6.860 6,860 6,860 20,580 Net income (loss) $(4,900) $7,840 $3,920 $6,860 The allocated fixed costs are unavoidable. Demand of individual products are not affected by changes in other product lines. What will happen to profits if Sandhill discontinues the Flipflops product line? If Sandhill discontinues the Flipflops product line profit will by $
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