Answer:
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
