Question
Sheridan Trivia Co. manufactures and sells two trivia products, the Square Trivia Game and the Round Trivia Game. Last quarters operating profits, by product, and
Sheridan Trivia Co. manufactures and sells two trivia products, the Square Trivia Game and the Round Trivia Game. Last quarters operating profits, by product, and for the company as a whole, were as follows:
Square Round Total
Sales revenue $15,500 $6,610 $22,110
Variable expenses 4,830 2,990 7,820
Contribution margin 10,670 3,620 14,290
Fixed expenses 2,930 4,200 7,130
Operating income $ 7,740 $(580 ) $ 7,160
Forty percent of the Round Games fixed costs could have been avoided if the game had not been produced or sold. If the Round Game had been discontinued before the last quarter, what would operating income have been for the company as a whole?
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