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Top managers of Georgia Flooring are alarmed by their operating losses. They are considering dropping the laminate flooring product line. Company accountants have prepared the
Top managers of Georgia Flooring are alarmed by their operating losses. They are considering dropping the laminate flooring product line. Company accountants have prepared the following analysis to help make this decision:
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Total fixed costs will not change if the company stops selling laminate flooring.
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Requirement Prepare an incremental analysis to show whether Georgia Flooring should discontinue the laminate flooring product line. Will discontinuing laminate flooring add $ to operating income? Explain. Enter a in an input field if there is no expected change as a result of discontinuing the laminate flooring product in this scenario.
tableIncremental Analysis for Discontinuation Decision,TotalContribution margin lost if laminate flooring product line is dropped,Less: Fixed cost savings if laminate flooring product line is dropped,Operating income if laminate flooring is dropped,
Analysis
tabletableGeorgia FlooringProduct Line Contribution Margin Income StatementFor the YearSales revenue,Product lines,Company TotalWod flooring,tableLaminateflooring
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