Chattanooga Company produces three versions of baseball bats: wood, aluminum, and hard rubber. A condensed segmented income statement for a recent period follows: Hard Rubber $65,000 58.000 Sales Variable expenses Contribution margin Fixed expenses Net income (loss) $105,000 $125,000 $114,000 Wood $500,000 325.000 $140,000 175,000 75.000 $100.000 Aluminum $200,000 140.000 60,000 35.000 $25.000 7,000 22.000 $(15.000) Assume only half of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped? Total $765,000 523.000 242,000 132.000 $110.000
Chattanooga Company produces three versions of baseball bats: wood, aluminum, and hard rubber. A condensed segmented income statement for a recent period follows: Hard Rubber $65,000 58.000 Sales Variable expenses Contribution margin Fixed expenses Net income (loss) $105,000 $125,000 $114,000 Wood $500,000 325.000 $140,000 175,000 75.000 $100.000 Aluminum $200,000 140.000 60,000 35.000 $25.000 7,000 22.000 $(15.000) Assume only half of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped? Total $765,000 523.000 242,000 132.000 $110.000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Chattanooga Company produces three versions of baseball bats: wood, aluminum, and hard rubber.
A condensed segmented income statement for a recent period follows:
Hard Rubber
$65,000
58.000
Sales
Variable expenses
Contribution margin
Fixed expenses
Net income (loss)
$105,000
$125,000
$114,000
Wood
$500,000
325.000
$140,000
175,000
75.000
$100,000
Aluminum
$200,000
140.000
60,000
35,000
$25.000
7,000
22,000
$(15,000)
Total
$765,000
523,000
Assume only half of the fixed expenses for the hard rubber line are avoidable. What will be total net
income if the line is dropped?
242,000
132.000
$110,000
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