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Wedding Supply is trying to decide whether or not to continue distributing reception supplies. The following information is available for Wedding Supply's business segments.
Wedding Supply is trying to decide whether or not to continue distributing reception supplies. The following information is available for Wedding Supply's business segments. Reception Supplies Bridal Dresses Floral Decorations Sales Variable costs Contribution margin Direct fixed costs $160,000 $110,000 $210,000 84,000 50,000 120,000 76,000 60,000 90,000 50,000 20,000 25,000 25,000 30,000 ($ 4,000) $ 15,000 $ 35,000 Allocated common fixed costs 30,000 Net Income If reception supplies are dropped, floral decoration sales are expected to increase by 5%. What impact will the increase in floral decorations have on overall profitability? Income will increase by $19,000. Income will increase by $16,000. Income will decrease by $17,000. Income will decrease by $8,000. Income will decrease by $21,500. O O C
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