Sheffield Corp. 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 $510000 $200000 $65000 $775000 Variable expenses 325000 140000 58000 523000 Contribution margin 185000 60000 7000 252000 Fixed expenses 75000 35000 22000 132000 Net income (loss) $110000 $ 25000 $ (15000) $120000 Assume none of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped? $140000 $105000 $135000 $113000

Question

Ahmed

Business

14 February, 00:01

Sheffield Corp. 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 $510000 $200000 $65000 $775000 Variable expenses 325000 140000 58000 523000 Contribution margin 185000 60000 7000 252000 Fixed expenses 75000 35000 22000 132000 Net income (loss) $110000 $ 25000 $ (15000) $120000 Assume none of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped? $140000 $105000 $135000 $113000

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Karissa Bates · Answer 1

The correct answer is D.

Explanation:

Giving the following information:

Sales=$775000

Variable expenses = 523000

Contribution margin = 252000

Fixed expenses = 132000

Net income = $120000

Hard Rubber:

Sales=$65000

Variable expenses=58000

Contribution margin = 7000

Fixed expenses = 22000

Net income = - 15000

New net income = 120,000 + 15,000 - 22,000 = 113,000