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The following data were taken from the Helicon Company. Based on these data, the management of Helicon is considering eliminating product line B. they assumed
The following data were taken from the Helicon Company. Based on these data, the management of Helicon is considering eliminating product line B. they assumed that by operating only product line A and C, the company would have higher profits. Product A 100,000 Product B 200,000 Product C 300,000 Sales Cost of Sales: Materials Labor Variable overhead Fixed overhead TOTAL Gross Margin Selling and Administrative: Variable Fixed TOTAL Net income (los) 25,000 20,000 10,000 5,000 60,000 40,000 80,000 50,000 15,000 35,000 180,000 20,000 75,000 40,000 20,000 15,000 150,000 150,000 12,000 8,000 20,000 20,000 10,000 30,000 40,000 (20,000) 30,000 40,000 70,000 80,000 It was determined that if product B is discontinued, 60% of the fixed overhead can be avoided and 50% of fixed selling and administrative expenses can also be avoided. Required: Based on the above data, should product line B be eliminated
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