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)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:C. Bucket Inc. manufacturers three products: pajamas, slippers and robes. It is considering
eliminating robes because the product line is unprofitable. The company's most recent contribution
margin format income statement is as follows:
Sales Revenue
Less: Variable Costs
Contribution
Margin
Less: Fixed Costs
Net Operating
Income
C. Bucket Inc.
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)
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