Please do not give solution in image format thanku C. Bucket Inc. manufacturers three products: pajamas, slippers and robes. It is consideringeliminating robes because the product line is unprofitable. The company's most recent contributionmargin format income statement is as follows:Sales RevenueLess: Variable CostsContributionMarginLess: Fixed CostsNet OperatingIncomeC. Bucket Inc.Contribution Margin Income StatementTotal (Company)$860,000590.000270,000140.000$130,000Pajamas$340,000220.000120,00040.000$80,000Robes$220,000190,00030,00050.000($20,000)Slippers$300,000180.000120,00050.000$70,000If C. Bucket Inc. eliminates Robes, $25,000 of its fixed costs will not be eliminated. Compute thechange in C. Bucket's net income if Robes is eliminated. (Enter a decrease as a negative number;use a negative sign, not parentheses)

We will look at the relevant cash flows in this case. Relevant cash flows are those cash flows that…

Sales Revenue Less: Variable Costs Contribution Margin Less: Fixed Costs Net Operating Income Contribution Margin Income Statement Total (Company) $860,000 590.000 270,000 140.000 $130,000 Pajamas $340,000 220.000 120,000 40.000 $80,000 Robes $220,000 190.000 30,000 50.000 ($20,000) Slippers $300,000 180.000 120,000 50.000 $70,000 If C. Bucket Inc. eliminates Robes, $25,000 of its fixed costs will not be eliminated. Compute the change in C. Bucket's net income if Robes is eliminated. (Enter a decrease as a negative number; use a negative sign, not parentheses)

Sales Revenue Less: Variable Costs Contribution Margin Less: Fixed Costs Net Operating Income Contribution Margin Income Statement Total (Company) $860,000 590.000 270,000 140.000 $130,000 Pajamas $340,000 220.000 120,000 40.000 $80,000 Robes $220,000 190.000 30,000 50.000 ($20,000) Slippers $300,000 180.000 120,000 50.000 $70,000 If C. Bucket Inc. eliminates Robes, $25,000 of its fixed costs will not be eliminated. Compute the change in C. Bucket's net income if Robes is eliminated. (Enter a decrease as a negative number; use a negative sign, not parentheses)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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