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5,000) 0,000 000) $ 5,000 $ 10,000 $ (5,000) $

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
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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