Prepare income data after eliminating Champ product line. Assume fixed costs are allocated 2/3 to...

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Illustration: Martina Company manufactures three models of tennis rackets: Profitable lines: Pro and Master Unprofitable line: Champ Pro Master Champ Total Sales $800,000 $300,000 $100,000 $1,200,000 Variable Expenses 520,000 210,000 90,000 820,000 Contribution Margin 280,000 90,000 10,000 320,000 Fixed Expenses 80,000 50,000 30,000 160,000 Net Income $200,000 $40,000 $(20,000) $220,000 Should Champ be eliminated? Prepare income data after eliminating Champ product line. Assume fixed costs are allocated 2/3 to Pro and 1/3 to Master.

 

Solution ID:565798 | This paper was updated on 26-Nov-2015

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