Vaughn's currently manufactures art supplies, including markers. The marker sales generate total contribution margin of $78,900....

 

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Vaughn's currently manufactures art supplies, including markers. The marker sales generate total contribution margin of $78,900. Due to its fixed costs, however, that product line currently shows a net operating loss of $9,300. If Vaughn's drops markers from its product categories, it will save $69,600 in direct fixed costs associated with the marker production activities. Should Vaughn's drop its marker product line? Why or why not? (Enter loss using either a negative sign preceding the number eg.-45 or parentheses e.g. (45).) Operating income Vaughn's The company will be $ Keep $ drop the marker product line. by $ Drop if it drops the product line. Vaughn's currently manufactures art supplies, including markers. The marker sales generate total contribution margin of $78,900. Due to its fixed costs, however, that product line currently shows a net operating loss of $9,300. If Vaughn's drops markers from its product categories, it will save $69,600 in direct fixed costs associated with the marker production activities. Should Vaughn's drop its marker product line? Why or why not? (Enter loss using either a negative sign preceding the number eg.-45 or parentheses e.g. (45).) Operating income Vaughn's The company will be $ Keep $ drop the marker product line. by $ Drop if it drops the product line.

Answer rating: 100% (QA)

To determine whether Vaughns should drop its marker product line we need to calculate the overall im... View the full answer