Brown Bear Merchandising Inc. has three product lines in its retail stores: books, videos, and music....
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Brown Bear Merchandising Inc. has three product lines in its retail stores: books, videos, and music. Results of the fourth quarter are presented below: Books $25,000 Revenue Variable departmental costs Direct fixed costs Allocated fixed costs Net income (loss) I 17,000 4,000 5.00b $(1,000) Music $40,000 21,000 6,000 5,000 $ 8.000 Videos $28,000 12,000 3,000 5.000 $ 8.000 Total $93,000 50,000 13,000 15.000 $ 15.000 The allocated fixed costs are unavoidable. Demand for individual products is not affected by changes in other product lines. Instructions What will happen to profits if Brown Bear discontinues the Books product line? Brown Bear Merchandising Inc. has three product lines in its retail stores: books, videos, and music. Results of the fourth quarter are presented below: Books $25,000 Revenue Variable departmental costs Direct fixed costs Allocated fixed costs Net income (loss) I 17,000 4,000 5.00b $(1,000) Music $40,000 21,000 6,000 5,000 $ 8.000 Videos $28,000 12,000 3,000 5.000 $ 8.000 Total $93,000 50,000 13,000 15.000 $ 15.000 The allocated fixed costs are unavoidable. Demand for individual products is not affected by changes in other product lines. Instructions What will happen to profits if Brown Bear discontinues the Books product line?
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Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0133428704
15th edition
Authors: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
Posted Date:
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