Given the losses, managers at Greene Co. are evaluating whether the company should drop product C....

      

Transcribed Image Text:

Given the losses, managers at Greene Co. are evaluating whether the company should drop product C. In discussing the possibility, it was determined that dropping the product would allow for: Terminating the rental contract and saving 100% of the rent cost related to Product C . A savings of 90% of the utilities costs related to Product C Terminations and reassignments saving 80% of the supervisor's salaries related to Product C . . A savings of 60% of the maintenance costs of Product C . • A savings of 40% of the administrative costs of Product C. . What would the company overall Net Operating Income be if Product C was dropped? The accountant for Blanda Co has prepared the following product line income data Company Product Total B 140,000 20.000 12.000 8.000 Sales Variable Expenses Contribution Margin Fixed Expenses Rent Depreciation Utilities Supervisors' Salaries Maintenance Administrative Expenses Total Fixed Expenses Net Operating Income 78.000 62.000 8.000 5,600 3,400 5,000 3.300 12,000 37,300 24,700 A 85,000 45.000 40,000 4.500 3,000 2,000 1,500 1,500 3,000 15.500 24,500 1,000 1,200 500 500 600 2,000 5,800 2,200 C 35,000 21.000 14.000 2,500 1.400 900 3,000 1,200 7.000 16,000 (2,000) Given the losses, managers at Greene Co. are evaluating whether the company should drop product C. In discussing the possibility, it was determined that dropping the product would allow for: Terminating the rental contract and saving 100% of the rent cost related to Product C . A savings of 90% of the utilities costs related to Product C Terminations and reassignments saving 80% of the supervisor's salaries related to Product C . . A savings of 60% of the maintenance costs of Product C . • A savings of 40% of the administrative costs of Product C. . What would the company overall Net Operating Income be if Product C was dropped? The accountant for Blanda Co has prepared the following product line income data Company Product Total B 140,000 20.000 12.000 8.000 Sales Variable Expenses Contribution Margin Fixed Expenses Rent Depreciation Utilities Supervisors' Salaries Maintenance Administrative Expenses Total Fixed Expenses Net Operating Income 78.000 62.000 8.000 5,600 3,400 5,000 3.300 12,000 37,300 24,700 A 85,000 45.000 40,000 4.500 3,000 2,000 1,500 1,500 3,000 15.500 24,500 1,000 1,200 500 500 600 2,000 5,800 2,200 C 35,000 21.000 14.000 2,500 1.400 900 3,000 1,200 7.000 16,000 (2,000)