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Thank you in advance :) When Mr. Ree Active, president and chief executive of Precious Products Inc., first saw the segmented income statement below, he
Thank you in advance :)
When Mr. Ree Active, president and chief executive of Precious Products Inc., first saw the segmented income statement below, he flew into his usual rage: "When will we ever start showing a real profit? I'm starting immediate steps to eliminate those two unprofitable lines!" Sales Variable expenses Contribution margin Traceable fixed expenses Common expenses, allocated Operating income (loss) Total $250,000 119,000 131,000 98,000 32,900 $100 U $100,000 37,000 63,000 31,000 18,000 $14,000 Product Lines V $75,000 35,000 40,000 37,000 10,500 $7,500 w $75,000 47,000 28,000 30,000 4,400 $6,400 *These traceable expenses could be eliminated if the product lines to which they are traced were discontinued. Required: Recommend which segments, if any, should be eliminated. Prepare a report in good form to support yourStep by Step Solution
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