Crane Company has three product lines in its retail stores: books, videos, and music. The allocated fixed costs are based on units sold and are unavoidable. Demand of individual products is not affected by changes in other product lines. Results of the fourth quarter are presented below: Units sold Books Music Videos Total 820 1,640 1,640 4,100 Revenue $19,680 $39,360 $24,600 $83,640 Variable departmental costs 12,300 18,040 18,860 49,200 Direct fixed costs 2,460 4,920 3,280 10,660 Allocated fixed costs 3,608 7,216 7,216 18,040 Net income (loss) $1,312 $9,184 $(4,756) $5,740 Prepare an incremental analysis of the effect of dropping the Video product line. (Enter negative amounts using either a negative. sign preceding the number e.g. -45 or parentheses e.g. (45).) $ $
Crane Company has three product lines in its retail stores: books, videos, and music. The allocated fixed costs are based on units sold and are unavoidable. Demand of individual products is not affected by changes in other product lines. Results of the fourth quarter are presented below: Units sold Books Music Videos Total 820 1,640 1,640 4,100 Revenue $19,680 $39,360 $24,600 $83,640 Variable departmental costs 12,300 18,040 18,860 49,200 Direct fixed costs 2,460 4,920 3,280 10,660 Allocated fixed costs 3,608 7,216 7,216 18,040 Net income (loss) $1,312 $9,184 $(4,756) $5,740 Prepare an incremental analysis of the effect of dropping the Video product line. (Enter negative amounts using either a negative. sign preceding the number e.g. -45 or parentheses e.g. (45).) $ $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Crane Company has three product lines in its retail stores: books, videos, and music. The allocated fixed costs are based on units sold
and are unavoidable. Demand of individual products is not affected by changes in other product lines. Results of the fourth quarter are
presented below:
Units sold
Books
Music
Videos
Total
820
1,640
1,640
4,100
Revenue
$19,680
$39,360
$24,600
$83,640
Variable departmental costs
12,300
18,040
18,860
49,200
Direct fixed costs
2,460
4,920
3,280
10,660
Allocated fixed costs
3,608
7,216
7,216
18,040
Net income (loss)
$1,312
$9,184
$(4,756)
$5,740
Prepare an incremental analysis of the effect of dropping the Video product line. (Enter negative amounts using either a negative.
sign preceding the number e.g. -45 or parentheses e.g. (45).)
$
$
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