Brantly Company manufactures two products. Both products have the same sales price, and the volume of...

Transcribed Image Text:

Brantly Company manufactures two products. Both products have the same sales price, and the volume of sales is equivalent. However, due to the difference in production processes, Product A has higher variable costs and Product B has higher fixed costs. Management is considering dropping Product B because that product line has an operating loss. (Click the icon to view the income statement.) 9. If fixed costs cannot be avoided, should Brantly drop Product B? Why or why not? 10. If 50% of Product B's fixed costs are avoidable, should Brantly drop Product B? Why or why not? 9. If fixed costs cannot be avoided, should Brantly drop Product B? Why or why not? (Use a minus sign Expected decrease in revenue Expected decrease in total variable costs Expected increase (decrease) in operating income Brantly drop Product B because operating income will 10. If 50% of Product B's fixed costs are avoidable, should Brantly drop Product B? Why or why not? (U Expected decrease in revenue Expected decrease in total variable costs Expected decrease in fixed costs Expected decrease in total costs Expected increase(decrease) in operating income McCollum drop Product B because operating income will Data table Brantly Company Income Statement Month Ended June 30, 2024 Total Product A Product B Net Sales Revenue $ 110,000 $ 55,000 $ 55,000 95,250 48,750 46,500 Variable Costs Contribution Margin 14,750 6,250 8,500 Fixed Costs 36,000 3,600) 32,400 (21,250) $ 2,650 $ (23,900) Operating Income/(Loss) Print Done Brantly Company manufactures two products. Both products have the same sales price, and the volume of sales is equivalent. However, due to the difference in production processes, Product A has higher variable costs and Product B has higher fixed costs. Management is considering dropping Product B because that product line has an operating loss. (Click the icon to view the income statement.) 9. If fixed costs cannot be avoided, should Brantly drop Product B? Why or why not? 10. If 50% of Product B's fixed costs are avoidable, should Brantly drop Product B? Why or why not? 9. If fixed costs cannot be avoided, should Brantly drop Product B? Why or why not? (Use a minus sign Expected decrease in revenue Expected decrease in total variable costs Expected increase (decrease) in operating income Brantly drop Product B because operating income will 10. If 50% of Product B's fixed costs are avoidable, should Brantly drop Product B? Why or why not? (U Expected decrease in revenue Expected decrease in total variable costs Expected decrease in fixed costs Expected decrease in total costs Expected increase(decrease) in operating income McCollum drop Product B because operating income will Data table Brantly Company Income Statement Month Ended June 30, 2024 Total Product A Product B Net Sales Revenue $ 110,000 $ 55,000 $ 55,000 95,250 48,750 46,500 Variable Costs Contribution Margin 14,750 6,250 8,500 Fixed Costs 36,000 3,600) 32,400 (21,250) $ 2,650 $ (23,900) Operating Income/(Loss) Print Done

Answer rating: 100% (QA)

Answer To determine whether Brantly Company should drop Product B we need to consider the impact on ... View the full answer