Crane Trivia Co. manufactures and sells two trivia products, the Square Trivia Game and the Round Trivia Game. Last quarter'soperating profits, by product, and for the company as a whole, were as follows:SquareRoundTotalSales revenue$11,000$6,860$17,860Variable expenses5,0002,9107,910Contribution margin6,0003,9509,950Fixed expenses2,7504,2006,950Operating income$ 3,250$(250)$ 3,000Forty percent of the Round Game's fixed costs could have been avoided if the game had not been produced or sold.If the Round Game had been discontinued before the last quarter, what would operating income have been for the company as awhole?Operating income without round $

Round Game's Fixed Cost = $4200 Avoidable Fixed Cost = 40% of $4200 = $1680 Unavoidable Fixed Cost…

Answered: If the Round Game had been discontinued…

If the Round Game had been discontinued before the last quarter, what would operating income have been for the company as a whole? Operating income without round $

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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Question

Crane Trivia Co. manufactures and sells two trivia products, the Square Trivia Game and the Round Trivia Game. Last quarter's
operating profits, by product, and for the company as a whole, were as follows:
Square
Round
Total
Sales revenue
$11,000
$6,860
$17,860
Variable expenses
5,000
2,910
7,910
Contribution margin
6,000
3,950
9,950
Fixed expenses
2,750
4,200
6,950
Operating income
$ 3,250
$(250)
$ 3,000
Forty percent of the Round Game's fixed costs could have been avoided if the game had not been produced or sold.
If the Round Game had been discontinued before the last quarter, what would operating income have been for the company as a
whole?
Operating income without round $

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