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Sandhillindustries manufactures light fixtures for home, retail, and industrial customers. The retail line has been showing losses for several years, and management is considering dropping
Sandhillindustries manufactures light fixtures for home, retail, and industrial customers. The retail line has been showing losses for several years, and management is considering dropping the line. Recent income statements have been very similar to the following information which was prepared for the most recent year: Home Retail Industrial Total Sales $551000 $321000 $831000 $1703000 Variable costs 358800 218700 681600 1259100 192200 102300 149400 443900 Contribution margin Fixed costs Operating income 126000 131000 116000 373000 $66200 $(28700) $33400 $70900 Of the fixed costs $318000 of it is common costs that have been allocated equally to each product line. What will total operating income be if Sandhill drops the retail line? O $77300 $(6400 523600 599600
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