Marigold Machines has four product lines, one of which reflects the following results: Sales $221000 Variable costs 118000 Contribution margin 103000 Fixed costs 118000 Net loss $(15000) 43 If this product line is eliminated, 40% of the fixed costs can be eliminated and the other 60% will be allocated to other product lines. If management decides to eliminate this product line, what will happen to the company's net income? O It will increase by $15000. It will increase by $47200. It will decrease by $40800. O It will decrease by $55800.
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- Vaughn Machines has four product lines, one of which reflects the following results: Sales $220000 Variable costs 117000 Contribution margin 103000 Fixed costs 117000 Net loss $(14000) If this product line is eliminated, 45% of the fixed costs can be eliminated and the other 55% will be allocated to other product lines. If management decides to eliminate this product line, what will happen to the company's net income? It will decrease by $36350. It will decrease by $50350. It will increase by $14000. It will increase by $52650.A company has three product lines, one of which has the following results: Sales $214000 Variable expenses 127000 Contribution margin 87000 Fixed expenses 130000 Net loss $ (43000) If this product line is eliminated, 60% of the fixed expenses will be eliminated and the other 40% will be allocated to other product lines. If management decides to eliminate this product line, the company’s net income willA company has three product lines, one of which reflects the following results: Sales Variable expenses Contribution margin Fixed expenses Net loss O decrease by $4000. O increase by $4000 decrease by $82000 $181000 99000 O increase by $48000 82000 130000 If this product line is eliminated, 60% of the fixed expenses can be eliminated and the other 40% will be allocated to other product lines. If management decides to eliminate this product line, the company's net income will $ (48000)
- Cesar Company has three product lines: A, B and C. The information given below is available. Assume Cesar Company drops Product C. Cesar Company then doubles the production and sales of Product B without ?increasing fixed costs. What will happen to operating income Product C Product A $100,000 76,000 24,000 9,000 6,000 $9.000 Product B $90,000 48,000 42,000 18,000 9,000 $15.000 $44,000 35,000 9,000 3,000 7,700 S(1.700) Sales Variable costs Contribution margin Avoidable fixed costs Unavoidable fixed costs Operating income(loss) increase by $18,000 increase by $15,000 increase by $36,000 increase by $24,000 increase by $42,000 O O O O O2Jake Company has three product lines, one of which has the following results: Sales P215,000 Variable expenses 125,000 Contribution margin 90,000 Fixed expenses 130,000 Net loss P (40,000) If this product line is eliminated, 60% of the fixed expenses will be eliminated and the other 40% will be allocated to other product lines. If management decides to eliminate this product line, how much will the company's net income or loss be?
- XYZ Company is facing changes in its cost structure so that fixed costs will increase from $400,000 to $500,000, but variable costs will decrease from $12 per unit to $10 per unitit were to implement these changes at its current production level of 50, 0 units (with no change to selling price ), profit would not change. What would happen to the company's profit if the changes were implemented and production decreased to 45,000 units? a- It will stay the same. b -It will increase . C-none of the given answers d -It will decrease .The manufacturer of a product that a variable cost of $2.50 per unit and total fixed cost of $125,000 wants to determine the level of output necessary to avoid losses. a. what level of sales is necessary to break, even if the product is sold for $4.25? what will be the manufacturer's profit or loss on the sales of 1000,00 units? b.If fixed costs rise to $175,000, what is the new level of sales necessary to break even? c.If variable cost decline to $2.25 per unit, what is the new level of sales necessary to break even? d. If fixed cost were to increase to $17,000, while variable cost declined to $2.25 per unit, what is the new break-even level of sales? e. If a major proportion of fixed costs were noncahs (depreciation), would failure to achieve the break-even level of sales imply that the firm cannot pay its current obligation as they come due? Suppose $100,000 of the above fixed cost $125,000 werre depreciation expense. what level of sales would be the cash break-even level of sales?…How much would be the net effect on the total segment profit if product B is dropped and discontinued? Assume that by dropping product B, product A would increase A's sales by 80%. How much would be the net effect on the total segment profit? Assume that by dropping product B, product A would decrease A's sales by 20%. Moreover, 30,000 of common costs allocated are avoidable. How much would be the net effect on the total segment profit?
- (38) A company is considering closing one of its product lines. Current data on the product line are as follows: ♫ Sales revenue Variable costs Direct avoidable fixed costs $27,000 Indirect allocated fixed costs Net income (loss) on the product line ($4,000) The direct avoidable fixed costs will be eliminated if the product line is closed. The indirect allocated fixed costs will remain the same whether the product line is continued or closed. O It will increase by $2,000. O It will decrease by $2,000. (19,000) (10,000) (2.000) By how much will overall company net income change if this company decides to discontinue this product line? It will increase by $4,000. O It will decrease by $4,000. hThe following information is available for Titan Based on this information, the management is considering eliminating product line C. They assumed that by operating only product lines A and B, they would have higher profits. It was also determined that if product line C is discontinued, 80% of the fixed overhead can be avoided, and 70% of the fixed selling and administrative expenses can also be avoided. Product A Product B Product C Sales P100,000 P300,000 P200,000 Cost of Goods Sold Direct Materials 25,000 75,000 80,000 Labor 20,000 40,000 50,000 Variable Overhead 10,000 20,000 15,000 Fixed Overhead 5,000 15,000 35,000 Total 60,000 150,000 180,000 Gross Profit 40,000 150,000 20,000 Selling and Administrative…Hh2. Account