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Scenario A B Enter =0 in the cell for any cost not relevant to the decision. 5001 500 Number of pizzas ordered Sales revenue Variable
Scenario A B Enter "=0" in the cell for any cost not relevant to the decision. 5001 500 Number of pizzas ordered Sales revenue Variable costs Direct materials Direct labor Variable overhead Fixed overhead Total costs Expected change in operating income Should Pete accept the order? Part 3. Product Line Elimination Quiet Feet Inc. produces three different types of shoes. Complete the below contribution margin income statement for each product line. Allocate total fixed costs to each shoe type based on units as a percent of total units i.e. use units sold as the cost driver). Boots Sneakers Sandals Total Relevant? Sales (units) 6,000 15,000 4,000 25,000 Price $ 50.00 $ 25.00 $ 5.00 180,000 300.000 24,000 504,000 Sales revenue Variable costs Contribution margin Fixed costs (all allocated) Operating income 99,000 What is operating income if Quiet Feet Inc. stopped selling Boots? What is operating income if Quiet Feet Inc. stopped selling Sneakers? What is operating income if Quiet Feet Inc. stopped selling Sandals? What product line (if any) should Quiet Feet Inc. stop producing
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