Question: answer for this question please thank you Audio Mart is a retailer of radios, stereos, and televisions. The store carries two portable sound systems that
Audio Mart is a retailer of radios, stereos, and televisions. The store carries two portable sound systems that have radios, tape players, and speakers, System A of sightly higher quality than System B, costs $20 more with rare exceptions, the store also sells a headset when a system is sold. The headset can be used with either system. Variable-costing income statements for the three products fotow Sales Variable expenses. Contribution margin Less fixed cost Operating Income SYSTEM A $45.000 20,000 25,000 10,000 $15,000 b SYSTEM B $36,000 25,500 10.500 18,000 $(7.000) HEADSET $9,000 3,200 5,800 2,000 $3,000 $90,000 48,700 41,300 30.000 $11.300 The owner of the store is concerned about the profti performance of System 8 and is considering dropping it. ir me product is dropped, sales of System A will increase by 30%, and sales of headsets will drop by 25% Also, the total fixed cost will be shared by the remaining two products in equal proportion Required: Prepare segmented wycome statements for System A and the Headsets assuming that Should System be dropped? Why? TOTAL System is dropped
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