What amount of avoidable fixed costs would coronado

Reference no: EM133424589

Question: Blue, Inc., a producer of shower products, is evaluating the profitability of its men's, women's, and children's product lines. According to the information below, the men's category is unprofitable.

Men's Shower Products
Sales		$159,000
Variable costs		83,000
Contribution margin		76,000
Fixed costs		91,000
Operating income (loss)		$(15,000)

Blue has been having difficulty tapping into the men's market for shower products but strategically would like to have a very broad product offering. If it drops the men's product line, though, it could free up $28,000 in fixed costs. Having a bit more flexibility in its use of resources could be helpful in improving Blue's other offerings.

B) At what amount of avoidable fixed costs would Coronado be indifferent to keeping or dropping the men's line, considering only quantitative information?

Reference no: EM133424589

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