Lisa Inc. manufactures golf clubs in three models. For the year, the Mart line has a net loss of $10,000 from sales of $200,000, variable costs of $180,000, and fixed costs of $30,000. If the Mart line is eliminated, $20,000 of fixed costs will remain. Which of the following is correct? The Mart line should not be eliminated because the amount of contribution margin given up is not completely offset by the savings in fixed costs The Mart line should be eliminated because the amount of contribution margin given up is completely offset by the savings in fixed costs The Mart line should be eliminated because the amount of contribution margin given up is partially offset by the savings in fixed costs The Mart line should not be eliminated because the amount of contribution margin given up is more than the savings in fixed costs
Lisa Inc. manufactures golf clubs in three models. For the year, the Mart line has a net loss of $10,000 from sales of $200,000, variable costs of $180,000, and fixed costs of $30,000. If the Mart line is eliminated, $20,000 of fixed costs will remain. Which of the following is correct?
The Mart line should not be eliminated because the amount of contribution margin given up is not completely offset by the savings in fixed costs
The Mart line should be eliminated because the amount of contribution margin given up is completely offset by the savings in fixed costs
The Mart line should be eliminated because the amount of contribution margin given up is partially offset by the savings in fixed costs
The Mart line should not be eliminated because the amount of contribution margin given up is more than the savings in fixed costs
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