Abel Company produces three versions of baseball bats: wood, aluminum, and hard rubber. A condensed segmented income statement for a recent period follows: Wood Aluminum Hard Rubber Total Sales $500000 $200000 $65000 $765000 Variable expenses 325000 140000 58000 523000 Contribution margin 175000 60000 7000 242000 Fixed expenses 75000 35000 22000 132000 Net income (loss) $100000 $ 25000 $ (15000) $110000 Assume all of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped? a.$125,000 b.$103,000

c.$105,000

d.$140,000

Total Net income without hard rubber lines = $125,000

Explanation:

Abel Company produces three versions of baseball bats: wood, aluminum, and hard rubber.

A condensed segmented income statement for a recent period follows: Wood Aluminum Hard Rubber

Total Sales $500000 $200000 $65000 $765000

Variable expenses 325000 140000 58000 523000

Contribution margin 175000 60000 7000 242000

Fixed expenses 75000 35000 22000 132000

Net income (loss) $100000 $ 25000 $ (15000) $110000

Assume all of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped? a.$125,000

Wood Aluminum

Total Sales $500000 $200000

Variable expenses 325000 140000

Contribution margin 175000 60000

Fixed expenses 75000 35000

Net income $100000 $ 25000

Total Net income = $125,000