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Show all work, please. Assume that any direct labor is variable. 5. (10 points) Pearl Enterprises has provided the monthly income statement shown below. Total

Show all work, please. Assume that any direct labor is variable. image text in transcribed
5. (10 points) Pearl Enterprises has provided the monthly income statement shown below. Total Product A Product B Product C Sales $100,000 $50,000 $20,000 $30,000 10,000 20,000 Variable expenses 60,000 30,000 20,000 10,000 10,000 40,000 Contribution margin Fixed expenses 500 3000 4,500 9,000 Facilities cost 1.200 6,000 3,000 1,800 Depreciation 500 500 3.000 Supervisors' salaries 5,000 1.500 600 900 3,000 Maintenance 3,000 10,000 2,000 5,000 Administrative expense 33,000 13 500 5.800 13,700 Total fixed expenses 6,500 4.200 3700) 7,000 Net operating income The owners are considering dropping Product C. The following additional information is available: If Product C is dropped, sales volume of Product B is expected to increase by 10%. The $3,000 facilities cost of Product C is a traceable fixed cost.. The company's total depreciation would not change if Product C were dropped. The maintenance department will be able to reduce monthly expenses by $500 if Product Cis If Product C were dropped, the salaries of two administrative persons would be cut. Their combined salaries (included in Administrative expense) total $3,000 per month. a. By how much would the net operating income of Pearl increase or decrease if they drop Product c? Show your work

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