Solution-What will be total net income if the line is

What will be total net income if the line is dropped

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Question - 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	75,000	35,000	22,000	132,000
Net income (loss)	$100,000	$25,000	$(15,000)	$110,000

Assume all of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped?

a. $103,000

b. $125,000

c. $105,000

d. $140,000

Reference no: EM133062158

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What will be total net income if the line is dropped

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