The condensed income statement for Hayden Corp. for the past year is as follows: Product T U Sales $ 680,000 $320,000 Costs: Variable costs $(540,000) $(220,000) Fixed costs (145,000) (40,000) Total costs $(685,000) $(260,000) Income (loss) $ (5,000) $ 60,000 Management is considering the discontinuance of the manufacture and sale of Product T 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 Product U. The amount of change in profit for the current year that will result from the discontinuance of Product T is a
The condensed income statement for Hayden Corp. for the past year is as follows: Product T U Sales $ 680,000 $320,000 Costs: Variable costs $(540,000) $(220,000) Fixed costs (145,000) (40,000) Total costs $(685,000) $(260,000) Income (loss) $ (5,000) $ 60,000 Management is considering the discontinuance of the manufacture and sale of Product T 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 Product U. The amount of change in profit for the current year that will result from the discontinuance of Product T is a
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The condensed income statement for Hayden Corp. for the past year is as follows:
|
Product |
||
|
T |
U |
|
| Sales |
$ 680,000 |
$320,000 |
| Costs: | ||
| Variable costs |
$(540,000) |
$(220,000) |
| Fixed costs |
(145,000) |
(40,000) |
|
Total costs |
$(685,000) |
$(260,000) |
| Income (loss) | $ (5,000) | $ 60,000 |
Management is considering the discontinuance of the manufacture and sale of Product T 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 Product U. The amount of change in profit for the current year that will result from the discontinuance of Product T is a
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