Meditation Haven has three product lines. Its only unprofitable line is yoga blocks. The results of the yoga blocks line for 2020 is below:Sales 350000 Variable expenses 230000 Fixed expenses 180000 Net loss (60000) If this product line is eliminated, 70% of the fixed expenses can be eliminated. Using incremental analysis, would you recommend the company drop the yoga block line and why?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Meditation Haven has three product lines. Its only unprofitable line is yoga blocks. The results of the yoga blocks line for
2020 is below:Sales 350000 Variable expenses 230000 Fixed expenses 180000 Net loss (60000) If this product line is
eliminated, 70% of the fixed expenses can be eliminated. Using incremental analysis, would you recommend the
company drop the yoga block line and why?
Transcribed Image Text:Meditation Haven has three product lines. Its only unprofitable line is yoga blocks. The results of the yoga blocks line for 2020 is below:Sales 350000 Variable expenses 230000 Fixed expenses 180000 Net loss (60000) If this product line is eliminated, 70% of the fixed expenses can be eliminated. Using incremental analysis, would you recommend the company drop the yoga block line and why?
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