BlossomIndustries manufactures light fixtures for home, retail, and industrial customers. The retail 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: Home Retail Industrial Total Sales $551200 $321200 $831200 $1703600 Variable costs 358700 218800 681900 1259400 Contribution 192500 102400 149300 444200 margin Fixed costs 126200 131200 116200 373600 Operating income $66300 $(28800) $33100 $70600 Of the fixed costs, $318600 of it is common costs that have been allocated equally to each product line. What will total operating income be if Blossom drops the retail line?
BlossomIndustries manufactures light fixtures for home, retail, and industrial customers. The retail 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: Home Retail Industrial Total Sales $551200 $321200 $831200 $1703600 Variable costs 358700 218800 681900 1259400 Contribution 192500 102400 149300 444200 margin Fixed costs 126200 131200 116200 373600 Operating income $66300 $(28800) $33100 $70600 Of the fixed costs, $318600 of it is common costs that have been allocated equally to each product line. What will total operating income be if Blossom drops the retail line?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:BlossomIndustries manufactures light fixtures for home, retail, and industrial customers. The retail 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:
Home
Retail
Industrial
Total
Sales
$551200
$321200
$831200
$1703600
Variable costs
358700
218800
681900
1259400
Contribution
192500
102400
149300
444200
margin
Fixed costs
126200
131200
116200
373600
Operating income
$66300
$(28800)
$33100
$70600
Of the fixed costs, $318600 of it is common costs that have been allocated equally to each product line. What will total operating
income be if Blossom drops the retail line?
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