Reference no: EM132547769

Abel Company produces three versions of baseball bats: wood, aluminum, and hard rubber. A condensed segmented income statement for a recent period follows:

                                      Wood                   Aluminum               Hard                      Rubber

Total Sales                $500,000            $200,000              $65,000               $765,000
Variable expenses         325,000             140 000             58 000                    523 000
Contribution margin        175,000             60,000              7,000                       242,000
Fixed expenses                25,000                35,000           22,000                    132,000                                                                  Net income (loss)             $100,000              $ 25,000           $15,000                $110,000

Question 1: Assume none of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped?

a. $125,000 b. $103,000 c. $105,000 d. $140,000