The condensed income statement for Fletcher Inc. for the past year is as follows: Sales Product F Product G Product Product H Total $300,000 $210,000 $340,000 $850,000 Costs: Variable costs $(180,000) $(180,000) $(220,000) $(580,000) Fixed costs Total costs Income (loss) (50,000) (50,000) (40,000) (140,000) $(230,000) $(230,000) $(260,000) $(720,000) $70,000 $(20,000) $80,000 $130,000 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 Oa. $20,000 decrease Ob. $30,000 decrease Oc. $30,000 increase X d. $20,000 increase
The condensed income statement for Fletcher Inc. for the past year is as follows: Sales Product F Product G Product Product H Total $300,000 $210,000 $340,000 $850,000 Costs: Variable costs $(180,000) $(180,000) $(220,000) $(580,000) Fixed costs Total costs Income (loss) (50,000) (50,000) (40,000) (140,000) $(230,000) $(230,000) $(260,000) $(720,000) $70,000 $(20,000) $80,000 $130,000 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 Oa. $20,000 decrease Ob. $30,000 decrease Oc. $30,000 increase X d. $20,000 increase
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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GIVE PROPER EXPLANATION AND PROPER FORMATTING AND DO NOT GIVE SOLUTION IN IMAGE
Transcribed Image Text:The condensed income statement for Fletcher Inc. for the past year is as follows:
Sales
Product
F
Product
G
Product
Product
H
Total
$300,000 $210,000 $340,000 $850,000
Costs:
Variable costs $(180,000) $(180,000) $(220,000) $(580,000)
Fixed costs
Total costs
Income (loss)
(50,000) (50,000) (40,000) (140,000)
$(230,000) $(230,000) $(260,000) $(720,000)
$70,000 $(20,000) $80,000 $130,000
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
Oa. $20,000 decrease
Ob. $30,000 decrease
Oc. $30,000 increase
X
d. $20,000 increase
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