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Sunland Toys' management is considering eliminating product A, which has been showing a loss for several years. The company's annual income statement, is as follows:
Sunland Toys' management is considering eliminating product A, which has been showing a loss for several years. The company's annual income statement, is as follows: Total Sales aiab expenses Contribution margin $2,289,000 1,405,000 $1,801,500 5,495,500 601,400 1,099,000 3,392,400 $597,000 $803,600 $702,500 $2,103,100 $527,000 428,000 $522,000 $1,477,000 47,700 106,000 279,500 $635,500 S518,800 $649,900 $1,804,200 $52,600 $298,900 1,692,000 Advertising expense Depreciation expense 15,100 93,400 10,700 80,100 21,900 Corporate expenses Total fixed expenses Operating income $(38,500) $284,800 Advertising expense Specific to each product. Depreciation expense Specific to each product; no other use available, no resale value. Corporate expenses - Allocated based on number of employees
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