Solution-How will operating income be affected

How will operating income be affected

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Reference no: EM132819551

Question - Pottery Unlimited has two product lines: cups and pitchers. Income statement data for the most recent year follow:

	Total	Cups	Pitchers
Sales revenue	$460,000	$310,000	$150,000
Variable expenses	355,000	235,000	120,000
Contribution margin	105,000	75,000	30,000
Fixed expenses	76,000	38,000	38,000
Operating income (loss)	$29,000	$37,000	$(8,000)

Assuming the Pitcher line at Pottery Unlimited is dropped, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $45,000 per year, how will operating income be affected?

Reference no: EM132819551

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How will operating income be affected : Assuming the Pitcher line at Pottery Unlimited is dropped, total fixed costs remain unchanged, How will operating income be affected

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How will operating income be affected

Reference no: EM132819551

Reference no: EM132819551

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