Solution-Evaluate whether unprofitable product line be

Evaluate whether unprofitable product line be disestablished

Reference no: EM133180951

Question - One of Solana Ltd's product line has been unprofitable for the past two years. The latest income statement for the product line is as follows:

Sales revenue		231,000
Less: Cost of sales		101,000
Gross profit		130,000
Operating expenses
Depreciation	33,000
Insurance	17,000
Manager salary	14,000
Supplies	21,000
Utilities	13,000
Wages	61,000
Total operating expenses		159,000
Profit or loss		(29,000)

In relation to the operating expenses, utilities, manager salary and $17,000 of the depreciation expense are allocated to this product line.

Required - Evaluate whether the unprofitable product line should be disestablished from a financial standpoint. Support your answer with relevant costs and benefit analysis.

Reference no: EM133180951

Questions Cloud

What is the amount of dividend payable : On December 31, 2021, what is the amount of dividend payable that should be recognized in the statement of financial position

How much is the basic earnings per share : Aqua reported a net income of P600,000 in 2020. The income tax rate is 30%. How much is the basic earnings per share in 2020

Conceptions of masculinity and femininity : Explain how orthodox conceptions of masculinity and femininity (as binary) produce and reproduce the idea

How much is the amount of provision for warranty : The cost of rectifying the normal defect is 10,000 while the significant defect is 30,000. How much is the amount of provision for warranty

Evaluate whether unprofitable product line be disestablished : Evaluate whether the unprofitable product line should be disestablished from a financial standpoint. Support answer with relevant costs and benefit analysis

Quality control- risk management : How will the content of the course Quality Control- Risk Management and Liability impact your interest or career in health care?

Journalize the adjusting entry on december : Journalize the adjusting entry on December 31 for the impaired goodwill. If an amount box does not require an entry, leave it blank

Think about the communication skills and techniques : Here you will investigate (research through LinkedIn or other social media) possible connections to professionals involved in humanitarian engineering who are c

Determine the amount of depletion expense for current year : Earth's Treasures Mining Co. acquired mineral rights for $80,750,000. Determine the amount of depletion expense for current year

User Account

All Pages

Evaluate whether unprofitable product line be disestablished

Reference no: EM133180951

Reference no: EM133180951

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

How much is paid for the shares

At what value should this fire engine initially be recorded

Summarize the learning teams marketing plan

How many times was interest earned in 2014

A company had calculated net income to be 77550 based on

Write a report to karin nilson

Explaining the implications for various stakeholders

Determine the amount of the branch beginning inventory

How farmers products discloses the law suit

Prepare a sales budget in units and dollars

Andre preneur supervises two consulting jobs in the

Calculate the dividends per share on each class of stock

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT