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Crane 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 Sales $400000   $100000   $65000   $565000 Variable expenses 275000   40000   58000   373000 Contribution margin 125000   60000   7000   192000 Fixed expenses 75000   35000   22000   132000 Net income (loss) $50000   $ 25000   $(15000)   $60000 Assume all of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped? $155000 $53000 $75000 $40000

Crane 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 Sales $400000   $100000   $65000   $565000 Variable expenses 275000   40000   58000   373000 Contribution margin 125000   60000   7000   192000 Fixed expenses 75000   35000   22000   132000 Net income (loss) $50000   $ 25000   $(15000)   $60000 Assume all of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped? $155000 $53000 $75000 $40000

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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Crane 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
Sales $400000   $100000   $65000   $565000
Variable expenses 275000   40000   58000   373000
Contribution margin 125000   60000   7000   192000
Fixed expenses 75000   35000   22000   132000
Net income (loss)
$50000
  
$ 25000
  
$(15000)
  
$60000


Assume all of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped?

$155000
$53000
$75000
$40000
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