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. The income statement information for Larkspur follows: Premium Regular Royal Total Sales units 105 kg 105 kg 105 kg 315 kg Sales $ 2.310
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The income statement information for Larkspur follows: Premium Regular Royal Total Sales units 105 kg 105 kg 105 kg 315 kg Sales $ 2.310 $ 1,680 $ 1,890 $ 5,880 Variable costs 1,470 1,050 1,134 3,654 Contribution margin 840 630 756 2,226 Production line fixed costs* 672 761 546 1,979 Corporate costs (allocated)** 95 84 110 289 Total fixed costs 767 845 656 2,268 - Operating income (loss) $ 73 A|| $ (215) || A $ 100 || A $ (42) ) || = = = = * If the company drops the product, these costs are no longer incurred. ** None of these corporate costs are expected to change if a product line is dropped. Using the general decision rule, which product should the corporation emphasize? Emphasis order Using the general decision rule, should the corporation drop Regular (assuming no changes in demand for other products)? Show how operating income would change if Regular were dropped. (Show a loss preceded by a minus sign, e.g. -200 or (200).) Regular be dropped. Operating income/(loss) $ At what point (in kg) would the managers be indifferent to dropping Regular? In other words, what is the breakeven point for Regular? (Round answer to 0 decimal places, e.g. 125.) Breakeven point kgStep by Step Solution
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