Prepare an analysis showing whether the company should

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Reference no: EM13485008

Lion Corporation manufactures several types of accessories. For the year, the gloves and mittens line had sales of $500,230, variable expenses of $372,460, and fixed expenses of $141,670. Therefore, the gloves and mittens line had a net loss of $13,900. If Lion eliminates the line, $38,710 of fixed costs will remain.

Prepare an analysis showing whether the company should eliminate the gloves and mittens line. (If answer is zero, please enter 0. Do not leave any fields blank. If amount decreases the income, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Enter all cost amounts in columns "Continue" and "Eliminate" as positive amounts and subtract where necessary.)

			Net Income
	Continue	Eliminate	Increase (Decrease)
Sales	$	$	$
Variable costs
Contribution margin
Fixed costs
Net income	$	$	$

1.What is the elimination for:

fixed cost
net income

2.What is the net income for all.

Reference no: EM13485008

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