The CoCo Corporation is considering dropping the following cat toys from its production line due to continuing
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The CoCo Corporation is considering dropping the following cat toys from its production line due to continuing losses. Data on the toy for the past year follow: Sales of 15,000 units 150,000 Variable expenses 120,000 Contribution margin 30,000 Fixed expenses 40,000 Net operating loss (10,000) If the toy were discontinued, CoCo could avoid $1,000 per year in fixed costs. The remainder of the fixed costs are not avoidable. The annual financial advantage (disadvantage) for the company from discontinuing the production and sale of the cat toy would be: (Put a - sign in front of your number if it is a disadvantage)
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
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