(38) A company is considering closing one of its product lines. Current data on the product line are as follows: D Sales revenue Variable costs Direct avoidable fixed costs $27,000 (19,000) (10,000) (2.000) Indirect allocated fixed costs Net income (loss) on the product line ($4.000) The direct avoidable fixed costs will be eliminated if the product line is closed. The indirect allocated fixed costs will remain the same whether the product line is continued or closed. By how much will overall company net income change if this company decides to discontinue this product line?

(38) A company is considering closing one of its product lines. Current data on the product line are as follows: D Sales revenue Variable costs Direct avoidable fixed costs $27,000 (19,000) (10,000) (2.000) Indirect allocated fixed costs Net income (loss) on the product line ($4.000) The direct avoidable fixed costs will be eliminated if the product line is closed. The indirect allocated fixed costs will remain the same whether the product line is continued or closed. By how much will overall company net income change if this company decides to discontinue this product line?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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