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dedylja [7]
2 years ago
11

Current Attempt in Progress Swifty Corporation produces three versions of baseball bats: wood, aluminum, and hard rubber. A cond

ensed segmented income statement for a recent period follows: Wood Aluminum Hard Rubber Total Sales $550000 $240000 $65000 $855000 Variable expenses 345000 180000 58000 583000 Contribution margin 205000 60000 7000 272000 Fixed expenses 75000 35000 22000 132000 Net income (loss) $130000 $ 25000 $(15000) $140000 Assume none of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped?
Business
1 answer:
jarptica [38.1K]2 years ago
5 0

Answer:

None of the fixed costs are avoidable. Therefore the company now loses all the fixed costs and the positive contribution margin.

Explanation:

Giving the following information:

Wood Aluminum Hard Rubber

Total Sales $65000

Variable expenses (58000)

Contribution margin 7000

Fixed expenses  (22000)

Net income (loss) (15000)

Effect on income= -22,000 - 7,000= -29,000

None of the fixed costs are avoidable. Therefore the company now loses all the fixed costs and the positive contribution margin.

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If a monopsonist offers a wage of $6, he finds that 1,200 people are willing to work for him. This means that the: a marginal factor cost is $6.

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