Mission Company has three product lines: D, E, and F. The following information is available: D E F Sales revenue 83,000 42,000 24,000 Variable expenses 40,000 26,000 15,000 43,000 16,000 9,000 Fixed expenses 12,000 15,000 17,000 Operating income 31,000 1,000 $(8,000) Mission company is thinking of discontinuing product line F because it is reporting an operating loss. All fixed expenses are unavoidable. Assuming Mission Company discontinues product line F and does not replace it, what affect will this have an operating income?
Mission Company has three product lines: D, E, and F. The following information is available: D E F Sales revenue 83,000 42,000 24,000 Variable expenses 40,000 26,000 15,000 43,000 16,000 9,000 Fixed expenses 12,000 15,000 17,000 Operating income 31,000 1,000 $(8,000) Mission company is thinking of discontinuing product line F because it is reporting an operating loss. All fixed expenses are unavoidable. Assuming Mission Company discontinues product line F and does not replace it, what affect will this have an operating income?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Mission Company has three product lines: D, E, and F. The following information is available:
|
|
D |
E |
F |
|
Sales revenue |
83,000 |
42,000 |
24,000 |
|
Variable expenses |
40,000 |
26,000 |
15,000 |
|
|
43,000 |
16,000 |
9,000 |
|
Fixed expenses |
12,000 |
15,000 |
17,000 |
|
Operating income |
31,000 |
1,000 |
$(8,000) |
Mission company is thinking of discontinuing product line F because it is reporting an operating loss. All fixed expenses are unavoidable. Assuming Mission Company discontinues product line F and does not replace it, what affect will this have an operating income?
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