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Author Question: Pottery Unlimited has two product lines: cups and pitchers. Income statement data for the most ... (Read 66 times)

Pea0909berry

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Pottery Unlimited has two product lines:  cups and pitchers.  Income statement data for the most recent year follow:

TotalCupsPitchers
Sales revenue$460,000$310,000$150,000
Variable expenses355,000235,000120,000
Contribution margin105,00075,00030,000
Fixed expenses76,00038,00038,000
Operating income (loss)$29,000$37,000$(8,000)


Assuming the Pitcher line at Pottery Unlimited is dropped, total fixed costs remain unchanged, and the space formerly used to produce the Pitcher line is used to double the production of Cups, how will operating income be affected?
◦ Increase $45,000
◦ Decrease $45,000
◦ Increase $74,000
◦ Increase $150,000


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Marked as best answer by Pea0909berry on Jan 4, 2020

kishoreddi

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Pea0909berry

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Reply 2 on: Jan 4, 2020
YES! Correct, THANKS for helping me on my review


okolip

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Reply 3 on: Yesterday
:D TYSM

 

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