%E8-40B (similar to) A Data Table - X Ouestion Help Suppose Smiley is considering discontinuing its coco crispies product line. Assume that during the past year, (Click the icon to view the income statement data) Click the icon for additional information the company decides to discontinue the product line, what will happen to the company's operating income Shq Sales revenue $ 700.000 6.150.000 Less: Cost of goods sold Gross profit 1.500.000 Less: Operating expenses Operating Income (los) 150.000 Begin by preparing a contribution margin income statement for the coco crispies product line. (Use a minus sign Sales revenue $ 7,650.000 Less: Variable expenses 4.845,000 Contribution margin $ 2,805,000 Less: Fixed expenses 2,955,000 $ 150,000) Operating income foss) Print Done More Info - X inuing Prepare an incremental analysis to show how the discontinued coco crispies productie wil affect Smiley O's of COCO Crispies) Incremental Analysis for Discontinuation Decision Total Contribution margin lost coco crispies is discontinued 2.805.000 Less: Fored cost savings if coco crispies is discontinued Operating income gained if coco crispies is discontinued Fixed manufacturing overhead costs account for 40% of the cost of goods, while only 30% of the operating expenses are fxed. Since the coco crispies line is just one of the company's cereal operations, only $720,000 of direct fixed costs (the majority of which is advertising) will be eliminated if the product line is discontinued. The remainder of the foxed costs will still be incurred by the company Choose from any list or enter any number in the input fields and then click Check Answer Print Done 1 remaining Clear All