Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN: 9781305961883
Author: Carl Warren
Publisher: Cengage Learning
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General Accounting Question please provide correct solution this question

The condensed income statement for Coastal Manufacturing for the past year is presented as
follows:
Product Sales
A
Variable
Cost
$300,000 $180,000
Contribution
Margin
Fixed
Cost
Income (Loss) From
Operation
$120,000
$50,000
$70,000
B
$250,000 $220,000
$30,000
$40,000
$(10,000)
C
$400,000 $260,000
$140,000
$60,000 $80,000
Total
$950,000 $660,000
$290,000
$150,000
$140,000
Management is considering discontinuing Product B at the beginning of the current year. The
discontinuance would have no effect on the total fixed costs and expenses or the sales of
Products A and C.
What is the amount of change in net income for the current year that will result from the
discontinuance of Product B?
a. $10,000 decrease
b. $30,000 increase
c. $30,000 decrease
d. $10,000 increase
e. None of the listed responses is correct
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Transcribed Image Text:The condensed income statement for Coastal Manufacturing for the past year is presented as follows: Product Sales A Variable Cost $300,000 $180,000 Contribution Margin Fixed Cost Income (Loss) From Operation $120,000 $50,000 $70,000 B $250,000 $220,000 $30,000 $40,000 $(10,000) C $400,000 $260,000 $140,000 $60,000 $80,000 Total $950,000 $660,000 $290,000 $150,000 $140,000 Management is considering discontinuing Product B at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or the sales of Products A and C. What is the amount of change in net income for the current year that will result from the discontinuance of Product B? a. $10,000 decrease b. $30,000 increase c. $30,000 decrease d. $10,000 increase e. None of the listed responses is correct
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