Question
Total Cat Food Dog Food Sales revenue $385,000 $300,000 $85,000 Variable expenses $197,000 $170,000 $27,000 Contribution margin $188,000 $130,000 $58,000 Fixed expenses $102,000 $50,000 $52,000
| Total | Cat Food | Dog Food | |
| Sales revenue | $385,000 | $300,000 | $85,000 |
| Variable expenses | $197,000 | $170,000 | $27,000 |
| Contribution margin | $188,000 | $130,000 | $58,000 |
| Fixed expenses | $102,000 | $50,000 | $52,000 |
| Operating income (loss) | $86,000 | $80,000 | $6,000 |
Assuming the Dog food line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the Dog food line is used to double the production of Cat food, how will operating income be affected?
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Fundamentals Of Accounting And Financial Analysis
Authors: Anil Chowdhury
1st Edition
9788131702024, 9788131776070
