Blowing Sand Company produces the Drafty model fan, which currently has a net loss of $38,000 as follows:
Drafty Model
Sales revenue $ 250,000
Less: Variable costs 175,000
Contribution margin $ 75,000
Less: Direct fixed costs 69,000
Segment margin $ 6,000
Less: Common fixed costs 44,000
Net operating income (loss) $ (38,000)
Eliminating the Drafty product line would eliminate $69,000 of direct fixed costs. The $44,000 of common fixed costs would be redistributed to Blowing Sand's remaining product lines.
Will Blowing Sand's net operating income increase or decrease if the Drafty model is eliminated? By how much?
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Blowing Sand Company produces the Drafty model fan, which currently has a net loss of $38,000 as follows: Drafty Model Sales revenue $ ...” 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
Suppose that marginal propensity to consume is equal to 0.9, and the government increases its spending by $200 billion. This new increase in spending is financed by a fresh increase in taxes equal to $200 billion. As a result of this, GDP will: a.
Answers (1)
Professor may wants to learn how grandparents define their role when they become the guardians of their grandchild.
Answers (1)
Which of the following is a good technique to use when driving in an urban environment? A. Passing B. Drowsy driving C. Cover braking D. Drifting
Answers (2)
If a competitive industry is currently losing money, what can be expected to happen to the number of sellers, the price of the product, the volume of output and losses in this industry over time?
Answers (1)
The first financing for your new business will come from angel investors. a. True b. False
Answers (2)
New Questions in Business
Who should you' alert that you are interviewing for jobs? A. Your references B. Other possible employers C. Your classmates D. Your present employer
Answers (1)
Common allocation bases are a. direct labor dollars, direct labor hours, and machine dollars b. machine dollars, direct labor dollars, and direct labor hours c. direct labor dollars, direct labor hours, and machine hours d.
Answers (1)
George and Weezy received $30,200 of Social Security benefits this year ($12,000 for George; $18,200 for Weezy). They also received $5,000 of interest from jointly owned City of Ranburne Bonds and dividend income.
Answers (1)
Which of the following is true regarding the high-tech industry today? a. It generally depends on a pool of low-skilled labor. b. It has led to the increased economic development of previously rural areas. c.
Answers (1)
Presented below are three receivables transactions. Indicate whether these receivables are reported as accounts receivable, notes receivable, or other receivables on a balance sheet. -Sold merchandise on account for $64,000 to a customer.
Answers (1)