Old People Racquets manufactures pickleball racquets in four different models. For the year, the Ancient People racquet line had a net loss of $40,000 from sales of $250,000, variable costs of $180,00 and fixed costs of $110,000. If the Ancient People line is eliminated, $30,000 of fixed costs will remain. Should the line be eliminated and why or why not? OIt should be kept because it has a positive contribution margin. It should be eliminated and save the company $10,000. O It should be elimninated-ancient people should never play any type of ball regardless of the dollars. It should be kept and save the company $10,000.
Old People Racquets manufactures pickleball racquets in four different models. For the year, the Ancient People racquet line had a net loss of $40,000 from sales of $250,000, variable costs of $180,00 and fixed costs of $110,000. If the Ancient People line is eliminated, $30,000 of fixed costs will remain. Should the line be eliminated and why or why not? OIt should be kept because it has a positive contribution margin. It should be eliminated and save the company $10,000. O It should be elimninated-ancient people should never play any type of ball regardless of the dollars. It should be kept and save the company $10,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Old People Racquets manufactures pickleball racquets in four different models. For
the year, the Ancient People racquet line had a net loss of $40,000 from sales of
$250,000, variable costs of $180,00 and fixed costs of $110,000. If the Ancient
People line is eliminated, $30,000 of fixed costs will remain. Should the line be
eliminated and why or why not?
It should be kept because it has a positive contribution margin.
It should be eliminated and save the company $10,000.
It should be elimninated-ancient people should never play any type of ball
regardless of the dollars.
It should be kept and save the company $10,000.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe8bdfa33-1942-447e-b795-22c8e965d533%2F8229770b-b294-4587-9f5f-b7c7ddc86d16%2F27bv4_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Old People Racquets manufactures pickleball racquets in four different models. For
the year, the Ancient People racquet line had a net loss of $40,000 from sales of
$250,000, variable costs of $180,00 and fixed costs of $110,000. If the Ancient
People line is eliminated, $30,000 of fixed costs will remain. Should the line be
eliminated and why or why not?
It should be kept because it has a positive contribution margin.
It should be eliminated and save the company $10,000.
It should be elimninated-ancient people should never play any type of ball
regardless of the dollars.
It should be kept and save the company $10,000.
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