Bramble, Inc., manufactures golf clubs in three models. For the year, the Big Bart line has a net loss of $6,600 from sales $200,000, variable costs $176,000, and fixed costs $30,600. If the Big Bart line is eliminated, $20,600 of fixed costs will remain. Prepare an analysis showing whether the Big Bart line should be eliminated. (Enter negative amounts using either a negative sign preceding the number e. g. - 45 or parentheses e. g. (45).)

Question

Ayden Farmer

Business

26 November, 16:48

Bramble, Inc., manufactures golf clubs in three models. For the year, the Big Bart line has a net loss of $6,600 from sales $200,000, variable costs $176,000, and fixed costs $30,600. If the Big Bart line is eliminated, $20,600 of fixed costs will remain. Prepare an analysis showing whether the Big Bart line should be eliminated. (Enter negative amounts using either a negative sign preceding the number e. g. - 45 or parentheses e. g. (45).)

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Kingston Mosley · Answer 1

Answer and Explanation:

The preparation of the analysis is shown below:

Particulars Continue Eliminate Net Income (Decrease)

Sales $200,000 $0 - $200,000

Less: Variable Costs $176,000 $0 - $176,000

Contribution margin $24,000 $0 - $24,000

Fixed Costs $30,600 $20,600 $10,000

Net Income/Loss - $6,600 - $20,600 - $14,000

As we can see that in both the cases whether eliminate or continue the amounts comes in negative but in continue there is a less amount of loss as compared to eliminated one

Therefore, in this case, the big Bart line could be continued