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Scotts sells both standard and premium bags of mulch. Assume the contribution income statements for both segments below. Standard Premium Total Sales $ 8 2
Scotts sells both standard and premium bags of mulch. Assume the contribution income statements for both segments below.
Standard Premium Total
Sales $ $ $
Less variable costs
Contribution margin
Less fixed cost
Net income loss $ $ $
Management is considering discontinuing the premium segment due to the segment's net loss of $ Of the total fixed costs for the premium segment, $ would not be incurred a cost saving if the premium segment is dropped. Management expects no changes in sales of the standard segment if the premium segment is discontinued.
If the premium segment is discontinued, what will be the net effect on profit of the company?
Note: Do not use a negative sign.
Profits would Answer by $Answer
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