Question
Valentin Co. sells three products: Laptops, tablets, and desktops. The product-specific financial information for each line is shown below: Laptops Tablets Desktops Sales $500,000
Valentin Co. sells three products: Laptops, tablets, and desktops. The product-specific financial information for each line is shown below: Laptops Tablets Desktops Sales $500,000 $300,000 $600,000 Total $1,400,000 Variable costs 150.000 200.000 300,000 650,000 Contribution margin 350,000 100,000 300,000 750,000 Fixed costs 400,000 80,000 150,000 630,000 Operating profit ($50,000) $20,000 $150,000 $120,000 Based on the schedule below, management is recommending that the laptop line be discontinued. Required: Show all of your work and document your assumptions for the questions below. a) Should the laptop line be discontinued? Why or why not? b) If dropping the laptop line would result in fixed cost savings of $349,000, would your answer change?
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International Marketing And Export Management
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
8th Edition
1292016922, 978-1292016924
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