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The income statement information for Oriole follows: Sales units Sales Variable costs Contribution margin Production line fixed costs* Corporate costs (allocated)** Total fixed costs Operating
The income statement information for Oriole follows: Sales units Sales Variable costs Contribution margin Production line fixed costs* Corporate costs (allocated)** Total fixed costs Operating income (loss) Premium Regular Royal Total 125 kg 125 kg 125 kg 375 kg $ 2,750 $ 2,000 $2,250 $7,000 1,750 1,250 1,350 4,350 1,000 750 900 2,650 800 906 650 2,356 113 100 131 344 913 1,006 781 2,700 $ 87 $ (256) $ 119 $ (50) * 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. Your answer is correct. Using the general decision rule, which product should the corporation emphasize? Emphasis order Premium, then Royal, then Regular Your answer is partially correct. Try again. 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 Tshould be dropped. Operating income/(loss) x Your answer is incorrect. Try again. 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 kg
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