Vulcan Swimsuit Company is considering dropping its line of women's beach robes. A recent product income statement
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Revenue ....................................................... $950,760
Cost of goods sold .......................................... 861,840
Gross margin ................................................ 88,920
Selling and administrative expenses ..................... 136,800
Net loss .......................................................$ (47,880)
Factory overhead accounts for 35 percent of the cost of the goods sold and is one-third fixed. These data are believed to reflect conditions in the immediate future.
Required:
Should the line be dropped?
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Related Book For
Accounting Texts and Cases
ISBN: 978-1259097126
13th edition
Authors: Robert Anthony, David Hawkins, Kenneth Merchant
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