Can I get some help on this problem, please? Current Attempt in ProgressKingbird's currently manufactures art supplies, including markers. The marker sales generate total contribution margin of $73,700.Due to its fixed costs, however, that product line currently shows a net operating loss of $9,900. If Kingbird's drops markers from itsproduct categories, it will save $64,500 in direct fixed costs associated with the marker production activities.Should Kingbird's drop its marker product line? Why or why not? (Enter loss using either a negative sign preceding the number e.g. -45 orparentheses e.g. (45).)Operating incomeKingbird'sThe company will be$eTextbook and MediaKeep$drop the marker product line.by $Dropif it drops the product line.

The contribution margin is calculated as difference between sales and variable costs. The operating…

Answered: Current Attempt in Progress Kingbird's…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 24P

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Ram Co. is trying to decide whether or not to discontinue one of its products, slow cookers. Last year's sales and expenses for slow cookers are as follows: Sales $65,000 Less expenses: Variable costs $35,000 Fixed costs 48,000 83,000 Net operating loss $(18,000) If slow cookers are discontinued, 75% of the fixed costs can be avoided. At the same time, discontinuing slow cookers will have no effect on other products. What is the financial advantage or disadvantage of discontinuing slow cookers? Multiple Choice a)$17,000 financial advantage b)$13,000 financial disadvantage c)$4,000 financial disadvantage d)$6,000 financial advantage
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The Draper Company is considering dropping its Dream bug toy due to continuing losses. Revenue and cost data on the toy for the past year follow: Sales of 15,000 units P 150,000 Variable expenses 120,000 Contribution margin 30,000 Fixed expenses 40,000 Net operating loss (P 10,000) If the toy were discontinued, then Draper could avoid P8,000 per year in fixed costs. 1. Under the given conditions, the change in annual operating income from discontinuing the production and sale of Doombugs would be: 2. Assuming all other conditions stay the same, at what level of annual sales of Doombugs (in units) should Draper be indifferent to discontinuing Doombugs or continuing the production and sale of Doombugs? 3. Suppose that if the Doombug toy is dropped, the production and sale of other Draper toys would increase so as to generate a P16,000 increase in the contribution margin received from these…

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