Head Bucket, Inc. has two product lines—batting helmets and football helmets. The income statement data for the most recent year is as follows: Total Batting Helmets Football Helmets Sales revenue $950,000 $600,000 $350,000 Variable costs (480,000) (200,000) (280,000) Contribution margin $470,000 $400,000 $70,000 Fixed costs (182,000) (90,000) (92,000) Operating income (loss) $288,000 $310,000 $(22,000) Assuming the football helmet line is dropped, total fixed costs remain unchanged, and the space formerly used to produce the football helmet line is used to double the production of batting helmets, operating income will be ________. A. $400,000 B. $310,000 C. $182,000 D. $618,000
Head Bucket, Inc. has two product lines—batting helmets and football helmets. The income statement data for the most recent year is as follows: Total Batting Helmets Football Helmets Sales revenue $950,000 $600,000 $350,000 Variable costs (480,000) (200,000) (280,000) Contribution margin $470,000 $400,000 $70,000 Fixed costs (182,000) (90,000) (92,000) Operating income (loss) $288,000 $310,000 $(22,000) Assuming the football helmet line is dropped, total fixed costs remain unchanged, and the space formerly used to produce the football helmet line is used to double the production of batting helmets, operating income will be ________. A. $400,000 B. $310,000 C. $182,000 D. $618,000
Chapter2: Building Blocks Of Managerial Accounting
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Question
Head Bucket, Inc. has two product
lines—batting
helmets and football helmets. The income statement data for the most recent year is as follows:
|
Total
|
Batting Helmets
|
Football Helmets
|
Sales revenue
|
$950,000
|
$600,000
|
$350,000
|
Variable costs
|
(480,000)
|
(200,000)
|
(280,000)
|
Contribution margin
|
$470,000
|
$400,000
|
$70,000
|
Fixed costs
|
(182,000)
|
(90,000)
|
(92,000)
|
Operating income (loss)
|
$288,000
|
$310,000
|
$(22,000)
|
Assuming the football helmet line is dropped, total fixed costs remain unchanged, and the space formerly used to produce the football helmet line is used to double the production of batting helmets, operating income will be ________.
$400,000
$310,000
$182,000
$618,000
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