Waterway Industries produces three versions of baseball bats: wood, aluminum, and hard rubber. A condensed segmented income statement for a recent period follows: Wood Aluminum Hard Rubber TotalSales$520000 $210000 $65000 $795000Variable expenses330000 150000 58000 538000Contribution margin190000 60000 7000 257000Fixed expenses75000 35000 22000 132000Net income (loss)$115000 $ 25000 $(15000) $125000Assume none of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped?A. $150000B. $140000C. $118000D. $100000

Unavoidable Fixed costs are costs that cannot be avoided even if the production of that line is…

Answered: Waterway Industries produces three…

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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Waterway Industries produces three versions of baseball bats: wood, aluminum, and hard rubber. A condensed segmented income statement for a recent period follows:

	Wood	Aluminum	Hard Rubber	Total
Sales	$520000	$210000	$65000	$795000
Variable expenses	330000	150000	58000	538000
Contribution margin	190000	60000	7000	257000
Fixed expenses	75000	35000	22000	132000
Net income (loss)	$115000	$ 25000	$(15000)	$125000

Assume none of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped?

A. $150000

B. $140000

C. $118000

D. $100000

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