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The following product line information is for the Swiss Watch Company. The company is considering dropping its Children's product line due to poor op income
The following product line information is for the Swiss Watch Company. The company is considering dropping its Children's product line due to poor op income performance. Fixed expenses are allocated to each product line based on sales revenue. Sales Variable expenses Fixed expenses Operating income Watch Products Men's Women's Children's $30,000 $50,000 $40,000 10,000 15,000 25,000 15,000 25,000 20,000 $ 5,000 $10,000 $(5,000) (a.) Calculate the effect on the Swiss Company's operating income if the Children's watch product line is discontinued. Comment on your analysis. : (b.) Assume that Swiss Company discontinues its Children's product line. Calculate the total operating income for the Swiss Company
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