Answer:
The analysis indicates that Gator should manufacture gloves and mittens otherwise loss will be increased by $24,900
Explanation:
Given Data:
sales = $489,000,
variable expenses = $360,000
fixed expenses = $140,000.
Continue Eliminate Net Income
Increase (Decrease)
Sales $489,000 0 -$489,000
Variable costs $360,000 0 $360,000
Contribution margin $129,900 0 -$129,900
Fixed costs 140,000 $35,000 $105,000
Net income -$10,100 -$35,000 -$24,900
The analysis indicates that Gator should manufacture gloves and mittens otherwise loss will be increased by $24,900
