A company has three product lines, one of which reflects the following results:
Sales $215,000
Variable expenses 125,000
Contribution margin 90,000
Fixed expenses 130,000
Net loss $ (40,000)
If this product line is eliminated, 60% of the fixed expenses can be eliminated and the other 40% will be allocated to other product lines. If management decides to eliminate this product line, the company's net income will
a. increase by $40,000.
b. decrease by $90,000.
c. decrease by $12,000.
d. increase by $12,000.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “A company has three product lines, one of which reflects the following results: Sales $215,000 Variable expenses 125,000 Contribution ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Brick Co. has 170,000 shares of common stock outstanding at January 1, year 8. On May 1, year 8, it issued 30,000 additional shares of common stock. Outstanding all year were 12,000 shares of convertible cumulative preferred stock.
Answers (1)
What is the difference between a callable bond and a convertible bond?
Answers (2)
Equipment that had been acquired several years ago by a special revenue fund at a cost of $40,000 was sold for $15,000 cash. Accumulated depreciation of $30,000 existed at the time of the sale.
Answers (1)
LO 8.3What are some possible reasons for a direct labor time variance? utility usage decrease less qualified workers office supplies spending sales decline
Answers (1)
On December 31 of the current year, Jones Company purchased a building for $100,000, paying $40,000 in cash and signing a 15-year mortgage for the $60,000, taken out at 5% interest. The journal entry to record the purchase of the building would be:
Answers (1)
New Questions in Business
Conversion occurs when a person or event is the catalyst for implementing major changes for a system to meet business changes.
Answers (1)
In the current year, Generous University awarded scholarships to graduate students in the amount of $5,000,000. The recipients are not required to provide any services in return for the scholarships. How should the university record the award?
Answers (1)
Suppose that in 1984 the total output in a single good economy was 12,000 buckets of chicken. Also assume that in 1984 each bucket of chicken was priced at $16.
Answers (1)
European interest in the Middle East intensified after oil was discovered in the region. a. True b. False
Answers (1)
What type of marketing channel would Secure Insurance use if it offers its products exclusively through door-to-door salespersons?
Answers (1)