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what is the total net income NJOY inc would produce if the black diamond line was eliminated? Blue Mountain Black Diamond Sales Bunny Hill $
what is the total net income NJOY inc would produce if the black diamond line was eliminated?
Blue Mountain Black Diamond Sales Bunny Hill $ 500,000 275,000 Variable Expenses 400,000 260,000 100,000 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. a Step by Step Solution
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