Cambridge Roller Skates has three product lines—D, E, and F
The following information is available:
D E F
Sales revenue $70,000 $50,000 $30,000
Variable costs (30,000 ) (10,000 ) (12,000 )
Contribution margin $40,000 $40,000 $18,000
Fixed costs (20,000 ) (5,000 ) (25,000 )
Operating income (loss) $20,000 $35,000 $(7,000 )
The company is deciding whether to drop product line F because it has an operating loss. Assume that $21,000 of total fixed costs could be eliminated by dropping F. What effect would this decision have on operating income?
A) Operating income will increase by $25,000.
B) Operating income will increase by $3,000.
C) Operating income will decrease by $25,000.
D) Operating income will decrease by $3,000.
B .B)
Expected decrease in revenue $(30,000 )
Expected decrease in total variable costs $12,000
Expected decrease in fixed costs $21,000
Expected decrease in total costs 33,000
Expected increase in operating income $3,000
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Employees are likely to see an adaptive change as
A. highly threatening. B. moderately threatening. C. somewhat threatening. D. least threatening. E. totally unacceptable.
In a properly designed internal control system, the same employee may be permitted to:
A. approve vouchers for payment and also sign checks. B. receive and deposit checks and also approve write-offs of customer accounts. C. reconcile the bank statements and also receive and deposit cash. D. sign checks and also cancel supporting documents.
Use this information to answer the following question. Pinnacle Corporation has 90,000 shares of $10 par value common stock outstanding. The following transactions occurred during the year: Mar. 17 Declared a 10 percent stock dividend to stockholders of record on March 20. Market value of the stock was $22 on March 17. 30 Distributed the stock dividend. The entry to record the transaction of
March 17 is: A) Stock Dividends 198,000 Common Stock Distributable 90,000Additional Paid-in Capital 108,000 B) Common Stock Distributable 90,000 Common Stock 90,000 C) Common Stock Distributable 198,000 Common Stock 90,000Retained Earnings 108,000 D) Stock Dividends 198,000 Cash 198,000
The nonissuer exemption permits local businesses to raise capital from local investors to be used in the local economy without the need to register with the SEC
Indicate whether the statement is true or false