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What will be the total operating income for the corporation

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Reference no: EM133034407

Question - Pharoah Corporation makes mattresses in three sizes: twin, queen and king. Twin mattresses have shown a loss for several years, similar to the operating loss shown below:

 

Twin

Queen

King

Sales

$156000

$256000

$286000

Variable costs

78000

153000

190000

Contribution margin

78000

103000

96000

Fixed costs

86000

86000

86000

Operating income

($8000)

$17000

$10000

None of the fixed costs are avoidable. What will be the total operating income for the corporation if twin mattresses are discontinued?

a. $27000 profit

b. $105000 profit

c. $59000 loss

d. $24000 loss

Reference no: EM133034407

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