Abel Company produces three versions of baseball bats: wood, aluminum, and hard rubber. A condensed segmented income statement for a recentperiod follows:WoodAluminumHard RubberTotal$500,000$200,000$65,00058,000$765,000523,000SalesVariable expensesContribution marginFixed expenses325,000140,000175,00060,0007,000242,00075,000132,000$110,00035,00022,000Net income (loss)$100,000$ 25,000$(15,000)Assume none of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped?Select one:a. $103,000O b. $140,000c. $125,000d. $105,000

Introduction:- Calculation of total net income if the line is dropped as follows under:-

Answered: Assume none of the fixed expenses for…

Assume none of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped? Select one: O a. $103,000 O b. $140,000 O c. $125,000 O d. $105,000

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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Question

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
$500,000
$200,000
$65,000
58,000
$765,000
523,000
Sales
Variable expenses
Contribution margin
Fixed expenses
325,000
140,000
175,000
60,000
7,000
242,000
75,000
132,000
$110,000
35,000
22,000
Net income (loss)
$100,000
$ 25,000
$(15,000)
Assume none of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped?
Select one:
a. $103,000
O b. $140,000
c. $125,000
d. $105,000

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