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what is the total net income NJOY Inc produces with all three models? Bunny Hill Blue Mountain Black Diamond Sales 500,000 400,000 100,000 Variable Expenses
what is the total net income NJOY Inc produces with all three models?
Bunny Hill Blue Mountain Black Diamond Sales 500,000 400,000 100,000 Variable Expenses 275,000 260,000 85,000 Contribution Margin 225,000 140,000 15,000 20,000 Fixed Expenses - Common 100,000 80,000 Fixed Expenses - Unique 15,000 7,500 5,000 Net Income $ 110,000 $ (10,000) 52,500 Fixed expenses consist of $200,000 of common costs allocated to the three products based on relative sales, and additional fixed expenses of $15,000 (Bunny Hill), $7,500 (Blue Mountain), $5,000 (Black Diamond). The common costs will be incurred regardless of how many models are produced. The other fixed expenses would be eliminated if a model is phased out. Sean White, an executive with the company, feels the Black Diamond line should be discontinued to increase the company's net income Step by Step Solution
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