Sells and rents snorkeling gear and boogie boards

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Reference no: EM133502531

Question: Snorkel Mom is a company that sells and rents snorkeling gear and boogie boards. Assume below is the income statement from last year for the boogie board business segment:

Sales	$2,300,000
Variable expenses	$1,500,000
Contribution margin	$800,000
Fixed expenses	$950,000

If the boogie board segment was discontinued, Snorkel Mom could avoid $400,000 per year in fixed costs. The remainder of the fixed costs are not avoidable. The annual financial advantage (disadvantage) for the company discontinuing the the boogie board segment would be:

(Put a - sign in front of your number if it is a disadvantage. To get credit for the question your amount and direction must be correct. However, no dollar signs or commas.)

Reference no: EM133502531

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