Reference no: EM131812845

Question - Justin Industries produces three versions of tires: Supreme, Advanced, and Basic. A condensed segmented income statement for a recent period follows:

Supreme Advanced Basic Total

Sales $1,000,000 $400,000 $130,000 $1,530,000

Variable expenses 650,000 280,000 116,000 1,046,000

Contribution margin 350,000 120,000 14,000 484,000

Fixed expenses 150,000 70,000 44,000 264,000

Net income (loss) $200,000 $ 50,000 $(30,000) $220,000

Assume none of the fixed expenses for the Basic line are avoidable. What will be total net income if the line is dropped?

A) $250,000

B) $206,000

C) $210,000

D) $280,000