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Sheridan has three product lines in its retail stores: flipflops, sandals, and slippers. Results of the fourth quarter are presented below: Flipflops Sandals Slippers
Sheridan 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 920 1,840 1,840 4,600 Revenue $18,400 $36,800 $23,000 $78,200 Variable departmental costs 15,640 20,240 11,040 46,920 Direct fixed costs 920 2.760 1,840 5,520 Allocated fixed costs 6,440 6,440 6,440 19,320 Net income (loss) $(4,600) $7,360 $3,680 $6,440 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 Sheridan discontinues the Flipflops product line? If Sheridan discontinues the Flipflops product line profit will by $
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