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 $630,000 $450.000 $180,000 $75,000 $105,000 Microwave $255,000 $210.000 $45,000 $75,000 $(30,000) Total $885,000 $660.000 $225,000 $150,000 $75,000 If Germain Appliances can eliminate fixed costs of $33,000 and increase the sale of Toasters by 6,100 units at a selling price of $35 per unit and a contribution margin of $12 per unit, then discontinuing the Microwaves should result in which of the following? O A. Decrease in total operating income of $61,200 OB. Increase in total operating income of $61,200 O C. Decrease in total operating income of $28,200 OD. Increase in total operating income of $28,200

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

Horngrens Financial and Managerial Accounting

Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura

5th edition

9780133851281, 013385129x, 9780134077321, 133866297, 133851281, 9780133851298, 134077326, 978-0133866292

More Books

Students also viewed these Accounting questions