Question
The income statement for Offsuit Online Real Estate Training is presented below. The management team at the real estate training company not pleased with the
The income statement for Offsuit Online Real Estate Training is presented below. The management team at the real estate training company not pleased with the performance of their residential real estate training line and is considering dropping it. A cost study of the residential training line has revealed that $41892 of the Selling and $28078 of the Administrative fixed expenses cannot be avoided if the residential real estate training line is dropped. If the management at Bauer Online Real Estate Training decides to drop the line, what will the new company net income be? Calculate your answer to the nearest whole dollar.
| Total | Residential | Commercial | |
| Sales Revenue | $527000 | $185000 | $342000 |
| Variable Costs | 112000 | 34000 | 78000 |
| Contribution Margin | 415000 | 151000 | 264000 |
| Fixed Costs: | |||
| Selling | 185000 | 88000 | 97000 |
| Administrative | 203000 | 94000 | 109000 |
| Total Fixed Expenses | 388000 | 182000 | 206000 |
| Operating Income (Loss) | $27000 | $(31000) | $58000 |
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Operational Auditing For Management Control
Authors: Edward F Norbeck
1st Edition
0814451853, 978-0814451854
