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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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: A) P 30,000 decrease B) P 10,000 increase C) P 22,000 decrease D) P 18,000 increase 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? A) 20,000 B) 18,000 C) 6,000 D) 4,000…

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