Salty Pretzels Corporation has three product lines, Cinnamon, Chocolate, and Sea salt. The following information is...
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Salty Pretzels Corporation has three product lines, Cinnamon, Chocolate, and Sea salt. The following information is available: Cinnamon Chocolate Sea Salt Sales $100,000 $90,000 $88,000 Variable costs 76,000 48,000 79,000 Contribution margin $24,000 $42,000 $9,000 Fixed costs: 9,000 6,000 $9 000 Avoidable 18,000 3,000 Unavoidable 9,000 9,700 Operating income $15,000 $(3,700) Requirements: a. Should any product line be eliminated/discontinued? Explain why or why not. Show all calculations. Salty Pretzels Corporation has three product lines, Cinnamon, Chocolate, and Sea salt. The following information is available: Cinnamon Chocolate Sea Salt Sales $100,000 $90,000 $88,000 Variable costs 76,000 48,000 79,000 Contribution margin $24,000 $42,000 $9,000 Fixed costs: 9,000 6,000 $9 000 Avoidable 18,000 3,000 Unavoidable 9,000 9,700 Operating income $15,000 $(3,700) Requirements: a. Should any product line be eliminated/discontinued? Explain why or why not. Show all calculations.
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Sea salt product Contribution 9000 Less Avoidable fixed costs 3000 Relevant ... View the full answer
Related Book For
Fundamental financial accounting concepts
ISBN: 978-0078025365
8th edition
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward
Posted Date:
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