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Vulcan Swimsuit Company is considering dropping its line of women's beach robes. A recent product income statement for the robe line follows: Revenue $950,760 Cost of goods sold 861,840 Gross margin Selling and administrative expenses 88,920 136,800 $ (47,880) Net loss Factory overhead accounts for 35 percent of the cost of the goods sold and is one-third fixed. These data are believed to reflect conditions in the immediate future.

Vulcan Swimsuit Company is considering dropping its line of women's beach robes. A recent product income statement for the robe line follows: Revenue $950,760 Cost of goods sold 861,840 Gross margin Selling and administrative expenses 88,920 136,800 $ (47,880) Net loss Factory overhead accounts for 35 percent of the cost of the goods sold and is one-third fixed. These data are believed to reflect conditions in the immediate future.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Should the line be droppped?

Vulcan Swirmsuit Company is considering dropping its line of women's beach robes. A recent product income statement for the robe line follows: Revenue $950,760 Cost of goods sold 861,840 Gross margin Selling and administrative expenses 88,920 136,800 Net loss $ (47,880) Factory overhead accounts for 35 percent of the cost of the goods sold and is one-third fixed. These data are believed to reflect conditions in the immediate future.
Transcribed Image Text:Vulcan Swirmsuit Company is considering dropping its line of women's beach robes. A recent product income statement for the robe line follows: Revenue $950,760 Cost of goods sold 861,840 Gross margin Selling and administrative expenses 88,920 136,800 Net loss $ (47,880) Factory overhead accounts for 35 percent of the cost of the goods sold and is one-third fixed. These data are believed to reflect conditions in the immediate future.
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