Suppose Wheatum is considering discontinuing its outsie che product line. Assume that during the past year, the outsie ohs' product line income statement showed the following: (Click the icon to view the income statement data) Click the loon for additional information the company decides to discontinue the product line, what will happen to the company's operating income? Should Wheatum discontinue the patsie ohs product line? Begin by preparing a contribution margin income statement for the casie ohs' product line. (Use a minus sign or parentheses to enter a loss.) Sales revenue $ 7400,000 Less: Variable expenses 2.875.000 0 Data Table Contribution margin 4,525,000 Less: Fixed expenses 4.725,000 Operating income (loss) S (200000) Sales revenue Less: Cost of goods sold Gross profit Less: Operating expenses Operating income (oss) 7,400,000 5,950,000 1,450,000 1,650,000 (200.000) Print Done $ (200,000) Operating income (loss) Print Prepare an incremental analysis to show how the discontinued oatsie ohs product line will affect Wheatum's operating income. (Enter a "0" in an input box if there is no expected change as a result of discontinuing oatsie ohs.) Incremental Analysis for Discontinuation Decision Total Contribution margin lost if oatsie ohs is discontinued Less: Fixed cost savings if oatsie ohs is discontinued Operating income (3) if oatsie ohs is discontinued If Wheatum discontinued the oatsie ohs product line, it will (4) this product line. income. Therefore, Wheatum (5) discontinue 1: Data Table Sales revenue $ 7,400,000 5,950,000 Less: Cost of goods sold Gross profit 1,450,000 1,650,000 Less: Operating expenses Operating income (loss) (200,000) Suppose Wheatum is considering discontinuing its outsie che product line. Assume that during the past year, the outsie ohs' product line income statement showed the following: (Click the icon to view the income statement data) Click the loon for additional information the company decides to discontinue the product line, what will happen to the company's operating income? Should Wheatum discontinue the patsie ohs product line? Begin by preparing a contribution margin income statement for the casie ohs' product line. (Use a minus sign or parentheses to enter a loss.) Sales revenue $ 7400,000 Less: Variable expenses 2.875.000 0 Data Table Contribution margin 4,525,000 Less: Fixed expenses 4.725,000 Operating income (loss) S (200000) Sales revenue Less: Cost of goods sold Gross profit Less: Operating expenses Operating income (oss) 7,400,000 5,950,000 1,450,000 1,650,000 (200.000) Print Done $ (200,000) Operating income (loss) Print Prepare an incremental analysis to show how the discontinued oatsie ohs product line will affect Wheatum's operating income. (Enter a "0" in an input box if there is no expected change as a result of discontinuing oatsie ohs.) Incremental Analysis for Discontinuation Decision Total Contribution margin lost if oatsie ohs is discontinued Less: Fixed cost savings if oatsie ohs is discontinued Operating income (3) if oatsie ohs is discontinued If Wheatum discontinued the oatsie ohs product line, it will (4) this product line. income. Therefore, Wheatum (5) discontinue 1: Data Table Sales revenue $ 7,400,000 5,950,000 Less: Cost of goods sold Gross profit 1,450,000 1,650,000 Less: Operating expenses Operating income (loss) (200,000)
