Answer : True
>> Victor corporation should keep product line.
>> Because if product line is dropped still fixed cost is incurred.
>> If dropped fixed cost = $ 280,000 * 35 % = $ 98,000.
>> If dropped , victor will have a loss of $ 98,000
>> If not dropped victor will have a loss of $ 30,000
Victor Corporation has provided you with the following budgeted income statement for one of its products...
The following income statement is for X Company and its only two
products - A and B:
Total
Product A
Product B
Sales
$174,760
$85,650
$89,110
Variable Costs
96,836
51,390
45,446
Contribution margin
$77,924
$34,260
$43,664
Fixed costs:
Avoidable
71,970
24,600
47,370
Unavoidable
31,500
5,270
26,230
Profit
$-25,546
$4,390
$-29,936
Because Product B is showing a loss, X Company is considering
dropping it and saving its avoidable fixed costs. If it drops
Product B, X Company's new profits will be...
The income statement for Eideldown, Inc. is divided by its two product lines, blankets and pillows, as follows: Sales revenue Variable costs Contribution margin Fixed costs Operating income (loss) Blankets $700,000 250,000 450,000 85,000 $365,000 Pillows $600,000 330,000 270,000 85,000 $185,000 Total $1,300,000 580,000 720,000 170,000 $550,000 If total fixed costs remain unchanged and Eideldown, Inc. drops the pillows line, operating income will decrease by $270,000. O O True False
Structuring a Keep-or-Drop Product Line Problem with Complementary Effects Shown below is a segmented income statement for Hickory Company's three wooden flooring product lines: Strip Plank Parquet Total Sales revenue $400,000 $200,000 $300,000 $900,000 Less: Variable expenses 225,000 120,000 250,000 595,000 Contribution margin $175,000 $ 80,000 $ 50,000 $305,000 Less direct fixed expenses: Machine rent (5,000) (20,000) (30,000) (55,000) Supervision (15,000) (10,000) (5,000) (30,000) Depreciation (35,000) (10,000) (25,000) (70,000) Segment margin $120,000 $ 40,000 $ (10,000) $150,000 Hickory's management is...
The following income statement is for X Company and its only two products - A and B: Total Product A Product B Sales $180,560 $87,730 $92,830 Variable Costs 98,584 44,742 53,841 Contribution margin $81,976 $42,988 $38,989 Fixed costs: Avoidable 63,950 41,480 22,470 Unavoidable 35,550 29,920 5,630 Profit $-17,524 $-28,412 $10,889 Because Product A is showing a loss, X Company is considering dropping it and saving its avoidable fixed costs. If it drops Product A, X Company's new profits will be
The following income statement is for X Company and its only two products - A and B: Total Product A Product B Sales $181,000. $88,150. $92,850 Variable Costs. 100,384 50,245 50,139 Contribution margin $80,616 $37,905. $42,711 Fixed costs: Avoidable 64,830 24,440 40,390 Unavoidable 33,960 6,470 27,490 Profit $-18,174. $6,995 $-25,169 Because Product B is showing a loss, X Company is considering dropping it and saving its avoidable fixed costs. If it drops Product B, X Company's new profits will...
The following income statement is for X Company and its only two products - A and B: Product Product Total A B Sales $185,980 $91,190 $94,790 Variable 110,676 53,802 56,874 Costs Contribution $75,304 $37,388 $37,916 margin Fixed costs: Avoidable 51,720 22,570 29,150 Unavoidable 34,150 2,960 26,190 Profit $-10,566 $6,858 $-17,424 Because Product B is showing a loss, X Company is considering dropping it and saving its avoidable fixed costs. If it drops Product B, X Company's new profits will be
The following income statement is for X Company and its only two products - A and B: Total $180,270 99,381 $80,889 Product A $86,260 44,855 $41,405 Product B $94,010 54,526 $39,484 Sales Variable Costs Contribution margin Fixed costs: Avoidable Unavoidable Profit 63,530 36,430 $-19,071 38,720 28,530 $-25,845 24,810 7,900 $6,774 Because Product A is showing a loss, X Company is considering dropping it and saving its avoidable fixed costs. If it drops Product A, X Company's new profits will be
The following income statement is for X Company and its only two products - A and B: Total $181,100 102,336 $78,764 Product A $90,260 48.740 $41,520 Product B $90,840 53.596 $37,244 Sales Variable costs Contribution margin Fixed costs: Avoidable Unavoidable Profit 54,660 34,160 $-10,056 31,070 27,450 $-17,000 23,590 6.710 $6,944 Because Product A is showing a loss, X Company is considering dropping it and saving its avoidable fixed costs. If it drops Product A, X Company's new profits will be
The following income statement is for X Company and its only two products - A and B: Total Product A Product B Sales $171,890 $85,180 $86,710 Variable Costs 97,080 50,256 46,823 Contribution margin $74,810 $34,924 $39,887 Fixed costs: Avoidable 55,490 22,850 32,640 Unavoidable 31,430 5,970 25,460 Profit $-12,110 $6,104 $-18,213 Because Product B is showing a loss, X Company is considering dropping it and saving its avoidable fixed costs. If it drops Product B, X Company's new profits will be
The following income statement is for X Company and its only two products - A and B: Total $181,260 103,195 $78,065 Product A $87,540 51,649 $35,891 Product B $93,720 51,546 $42,174 Sales Variable Costs Contribution margin Fixed costs: Avoidable Unavoidable Profit 63,620 32,880 $-18,435 23,260 5,730 $6,901 40,360 27,150 $-25,336 Because Product B is showing a loss, X Company is considering dropping it and saving its avoidable fixed costs. If it drops Product B, X Company's new profits will be