At what amount of avoidable fixed costs would Marigold be indifferent to keeping or dropping the mense, considering vquantitative information?Avoidable foxed costs $ Current Attempt in ProgressMarigold, Inc., a producer of shower products, is evaluating the profitability of its men's, women's, and children's product lines.According to the information below, the men's category is unprofitable.SalesMen's Shower ProductsVariable costsContribution marginFixed costsOperating income (loss)$136,00094,00042.00058,000$(16,000)Marigold has been having difficulty tapping into the men's market for shower products but strategically would like to have a verybroad product offering. If it drops the men's product line, though, it could free up $30,000 in fixed costs. Having a bit more flexibility inits use of resources could be helpful in improving Marigold's other offerings

Lets understand the basics.Management have to choose between whether to continue production or stop…

Current Attempt in Progress Marigold, Inc., a producer of shower products, is evaluating the profitability of its men's, women's, and children's product lines. According to the information below, the men's category is unprofitable. Men's Shower Products Sales Variable costs Contribution margin Fixed costs Operating income (loss) $136.000 94,000 42.000 58,000 $(16,000) Marigold has been having difficulty tapping into the men's market for shower products but strategically would like to have a very broad product offering. If it drops the men's product line, though, it could free up $30,000 in fixed costs. Having a bit more flexibility in its use of resources could be helpful in improving Marigold's other offerings

Current Attempt in Progress Marigold, Inc., a producer of shower products, is evaluating the profitability of its men's, women's, and children's product lines. According to the information below, the men's category is unprofitable. Men's Shower Products Sales Variable costs Contribution margin Fixed costs Operating income (loss) $136.000 94,000 42.000 58,000 $(16,000) Marigold has been having difficulty tapping into the men's market for shower products but strategically would like to have a very broad product offering. If it drops the men's product line, though, it could free up $30,000 in fixed costs. Having a bit more flexibility in its use of resources could be helpful in improving Marigold's other offerings

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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es Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Incorporated, has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below: Sales (13,300 units x $20 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss Required: 1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales. 2. The president believes that a $6,300 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will increase unit sales and the total sales by $84,000 per month. If the president is right, what will be the increase (decrease) in the company's monthly net operating income? 3. Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $31,000 in the monthly advertising budget, will double unit sales. If the sales…
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