5,000) 0,000 000) $ 5,000 $ 10,000 $ (5,000) $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Juno Outdoor Products manufactures four different types of sleeping bags. Last year, Juno generated net
operating income of $1,000. The following information was taken from last year's income statement segmented
by product (brackets indicate a negative amount):
Contribution margin $
Segment margin
Arctic
Allocated common $ 10,000
fixed expenses
O Arctic and Desert
(2,000)
$ (16,000)
Segment margin less $ (26,000)
allocated common
fixed expenses
Arctic
O no bags should be discontinued
O Arctic and Backyard
Arctic Desert, and Backyard
Desert
$ 45,000
$
5,000
$ 10,000
$ (5,000)
Backyard
$ 35,000
$ (8,000)
$ 10,000
$ (18,000)
Indoor
$ 80,000
Juno expects similar operating results for the upcoming year. If Juno wants to maximize its profitability in the
upcoming year, which sleeping bag or bags should Juno discontinue?
$ 60,000
$ 10,000
$ 50,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F80f6887c-3490-42cd-a6a1-75d3038f06ae%2F8701e203-7853-4951-9e8d-474813b0a9a0%2Fsyveqor_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Juno Outdoor Products manufactures four different types of sleeping bags. Last year, Juno generated net
operating income of $1,000. The following information was taken from last year's income statement segmented
by product (brackets indicate a negative amount):
Contribution margin $
Segment margin
Arctic
Allocated common $ 10,000
fixed expenses
O Arctic and Desert
(2,000)
$ (16,000)
Segment margin less $ (26,000)
allocated common
fixed expenses
Arctic
O no bags should be discontinued
O Arctic and Backyard
Arctic Desert, and Backyard
Desert
$ 45,000
$
5,000
$ 10,000
$ (5,000)
Backyard
$ 35,000
$ (8,000)
$ 10,000
$ (18,000)
Indoor
$ 80,000
Juno expects similar operating results for the upcoming year. If Juno wants to maximize its profitability in the
upcoming year, which sleeping bag or bags should Juno discontinue?
$ 60,000
$ 10,000
$ 50,000
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