Question
When Rosana, CFO of Hydie Inc., first evaluated the segmented income statement below, he flew into his usual rage: When are we having losses in
When Rosana, CFO of Hydie Inc., first evaluated the segmented income statement below, he flew into his usual rage: "When are we having losses in our product lines, I would rather eliminate them.
*These traceable expenses could be eliminated if the product lines to which they are traced were discontinued.
| Product Lines | |||
| Total | U | V | W |
Sales | $250,000 | $100,000 | $75,000 | $75,000 |
Variable expenses | $119,000 | $37,500 | $35,000 | $47,000 |
Contribution margin | $131,000 | $63,000 | $40,000 | $28,000 |
Traceable fixed expenses* | $98,000 | $31,000 | $37,000 | $30,000 |
Common expenses, allocated | $32,900 | $18,000 | $10,500 | $4,400 |
Operating income (loss) | $100 | $14,000 | $(7,500) | $(6,400) |
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