Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The income statement for Germain Appliances is divided by its two product lines, Toasters and Microwaves, as follows: Sales revenue Variable expenses Contribution margin Fixed

image text in transcribed

The income statement for Germain Appliances is divided by its two product lines, Toasters and Microwaves, as follows: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Toaster $640,000 $430,000 $210,000 $75,000 $135,000 Microwave $255,000 $210,000 $45,000 $75,000 $(30,000) Total $895,000 $640.000 $255,000 $150,000 $105,000 If Germain Appliances can eliminate fixed costs of $35,000 and increase the sale of Toasters by 6,500 units at a selling price of $32 per unit and a contribution margin of $13 per unit, then discontinuing the Microwaves should result in which of the following? O A. Decrease in total operating income of $39,500 O B. Decrease in total operating income of $74,500 O C. Increase in total operating income of $74,500 OD. Increase in total operating income of $39,500

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Internal Auditing Basics Video Learning Guide

Authors: Charles A. Cianfrani & John E. West, James P. Gildersleeve

1st Edition

1891578251, 978-1891578250

More Books

Students also viewed these Accounting questions

Question

How did you feel about taking piano lessons as a child? (general)

Answered: 1 week ago