A company has three product lines, one of which has the following results:Sales$214000Variable expenses127000Contribution margin87000Fixed expenses130000Net loss$ (43000)If this product line is eliminated, 60% of the fixed expenses will be eliminated and the other 40% will be allocated to other product lines. If management decides to eliminate this product line, the company’s net income will

Income statement shows the net income or net loss calculated by deducting the expenses from the…

Answered: A company has three product lines, one…

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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A company has three product lines, one of which has the following results:

Sales	$214000
Variable expenses	127000
Contribution margin	87000
Fixed expenses	130000
Net loss	$ (43000)

If this product line is eliminated, 60% of the fixed expenses will be eliminated and the other 40% will be allocated to other product lines. If management decides to eliminate this product line, the company’s net income will

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