The condensed income statement for a business for the past year is presented as follows: Product F G H Sales Less Variable Cost $200,000 $180,000 120,000 160,000 Total $320,000 $700,000 200,000 480,000 Contribution Margin $80,000 $20,000 Less Fixed Cost 25,000 30,000 $120,000 $220,000 40,000 95,000 Income (Loss) From Operation $55,000 ($10,000) $80,000 $125,000 Management is considering the discontinuance of the manufacture and sale of Product G at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Products F and H. What is the amount of change of in net income for the current year that will result from the discontinuance of Product G? a. $10,000 decrease b. $20,000 increase c. $10,000 increase d. $20,000 decrease e. none of the listed responses is the correct answer
The condensed income statement for a business for the past year is presented as follows: Product F G H Sales Less Variable Cost $200,000 $180,000 120,000 160,000 Total $320,000 $700,000 200,000 480,000 Contribution Margin $80,000 $20,000 Less Fixed Cost 25,000 30,000 $120,000 $220,000 40,000 95,000 Income (Loss) From Operation $55,000 ($10,000) $80,000 $125,000 Management is considering the discontinuance of the manufacture and sale of Product G at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Products F and H. What is the amount of change of in net income for the current year that will result from the discontinuance of Product G? a. $10,000 decrease b. $20,000 increase c. $10,000 increase d. $20,000 decrease e. none of the listed responses is the correct answer
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The condensed income statement for ...accounting questions
Transcribed Image Text:The condensed income statement for a business for the past year is presented as follows:
Product
F
G
H
Sales
Less Variable Cost
$200,000 $180,000
120,000 160,000
Total
$320,000 $700,000
200,000 480,000
Contribution Margin
$80,000 $20,000
Less Fixed Cost
25,000
30,000
$120,000 $220,000
40,000 95,000
Income (Loss) From Operation
$55,000
($10,000)
$80,000 $125,000
Management is considering the discontinuance of the manufacture and sale of Product G at the
beginning of the current year. The discontinuance would have no effect on the total fixed costs and
expenses or on the sales of Products F and H.
What is the amount of change of in net income for the current year that will result from the
discontinuance of Product G?
a. $10,000 decrease
b. $20,000 increase
c. $10,000 increase
d. $20,000 decrease
e. none of the listed responses is the correct answer
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