he condensed income statement for a business for the past year is as follows: Product A Z Sales $660,000 $320,000 Less variable costs 540,000 220,000 Contribution margin $ 120,000 $100,000 Less fixed costs 145,000 40,000 Income (loss) from operations $ (25,000) $ 60,000 Management is considering the discontinuance of the manufacture and sale of Product A at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Product Z. What is the amount of change in net income for the current year that will result from the discontinuance of Product A (amount and increase or decrease)
he condensed income statement for a business for the past year is as follows: Product A Z Sales $660,000 $320,000 Less variable costs 540,000 220,000 Contribution margin $ 120,000 $100,000 Less fixed costs 145,000 40,000 Income (loss) from operations $ (25,000) $ 60,000 Management is considering the discontinuance of the manufacture and sale of Product A at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Product Z. What is the amount of change in net income for the current year that will result from the discontinuance of Product A (amount and increase or decrease)
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 12MC: Youngstown Construction plans to discontinue its rooting segment. Last year, this segment generated...
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The condensed income statement for a business for the past year is as follows:
|
Product |
|
|
A |
Z |
Sales |
$660,000 |
$320,000 |
Less variable costs |
540,000 |
220,000 |
Contribution margin |
$ 120,000 |
$100,000 |
Less fixed costs |
145,000 |
40,000 |
Income (loss) from operations |
$ (25,000) |
$ 60,000 |
Management is considering the discontinuance of the manufacture and sale of Product A at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Product Z. What is the amount of change in net income for the current year that will result from the discontinuance of Product A (amount and increase or decrease)?
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