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Author Question: Brown Manufacturing makes single kayaks, double kayaks, and lightweight competitive kayaks. The ... (Read 48 times)

Aimless0988

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Brown Manufacturing makes single kayaks, double kayaks, and lightweight competitive kayaks. The double kayak line has been showing losses for several years, and management is considering dropping the line. Recent income statements have been very similar to the following information which was prepared for the most recent year:

SingleDoubleCompetitiveTotal
Sales$687,500$400,000$1,037,500$2,125,000
Variable costs446,875272,000850,7501,569,625
Contribution margin240,625128,000186,750555,375
Fixed costs156,250162,500   143,750   462,500
Operating income$   84,375$(34,500)$     43,000$    92,875

Of the fixed costs, $393,750 is common costs that have been allocated equally to each product line. What will total operating income be if Brown drops the double kayak line?
◦ $(3,875)
◦ $96,750
◦ $33,625
◦ $127,375


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Marked as best answer by Aimless0988 on Feb 5, 2023

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Aimless0988

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Reply 2 on: Feb 5, 2023
Great answer, keep it coming :)


kalskdjl1212

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

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