The condensed income statement for a Fletcher Inc. for the past year is as follows: Product F G H Total Sales $300,000 $210,000 $340,000 $850,000 Costs: Variable costs $(180,000) $(180,000) $(220,000) $(590,000) Fixed costs (50,000) (50,000) (40,000) (140,000) Total costs $(230,000) $(230,000) $(260,000) $(730,000) Income (loss) $70,000 $(20,000) $80,000 $120,000 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. The amount of change in profit for the current year that will result from the discontinuance of Product G is a
The condensed income statement for a Fletcher Inc. for the past year is as follows:
|
Product |
||||
|
F |
G |
H |
Total |
|
|
Sales |
$300,000 |
$210,000 |
$340,000 |
$850,000 |
|
Costs: |
||||
|
Variable costs |
$(180,000) |
$(180,000) |
$(220,000) |
$(590,000) |
|
Fixed costs |
(50,000) |
(50,000) |
(40,000) |
(140,000) |
|
Total costs |
$(230,000) |
$(230,000) |
$(260,000) |
$(730,000) |
|
Income (loss) |
$70,000 |
$(20,000) |
$80,000 |
$120,000 |
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. The amount of change in profit for the current year that will result from the discontinuance of Product G is a
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