The following information is available on Crain Co.'s two product line: Sales Variable costs Contribution margin Fixed costs: Avoidable Unavoidable Operating income (loss) Chairs $24,000 $18,000 $28,800 $13,200 $180,000 (96,000) 84,000 (36,000) (18,000) $30,000 Tables $48,000 (30,000) 18000 (12,000) (10,800) ($4,800) Assuming the tables line is discontinued, and the factory space previously used to make tables is rented for $24,000 per year, operating income will increase by what amount?

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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The following information is available on Crain Co.'s two product line:
Sales
Variable costs
Contribution margin
Fixed costs:
Avoidable
Unavoidable
Operating income (loss)
$24,000
$18,000
Chairs
O $28,800
$13,200
$180,000
(96,000)
84,000
Tables
$30,000
$48,000
(30,000)
18000
(36,000) (12,000)
(18,000)
(10,800)
Assuming the tables line is discontinued, and the factory space previously used to make tables is rented for $24,000 per year,
operating income will increase by what amount?
($4,800)
Transcribed Image Text:The following information is available on Crain Co.'s two product line: Sales Variable costs Contribution margin Fixed costs: Avoidable Unavoidable Operating income (loss) $24,000 $18,000 Chairs O $28,800 $13,200 $180,000 (96,000) 84,000 Tables $30,000 $48,000 (30,000) 18000 (36,000) (12,000) (18,000) (10,800) Assuming the tables line is discontinued, and the factory space previously used to make tables is rented for $24,000 per year, operating income will increase by what amount? ($4,800)
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