Lisah, Inc., manufactures golf clubs in three models. For the year, the Big Bart

Question

Lisah, Inc., manufactures golf clubs in three models. For the year, the Big Bart line has a net loss of $3,600 from sales $201,000, variable costs $175,000, and fixed costs $29,600. If the Big Bart line is eliminated, $19,100 of fixed costs will remain. Prepare an analysis showing whether the Big Bart line should be eliminated. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Continue Eliminate Net Income
Increase (Decrease) Sales $

$

$

Variable costs

Contribution margin

Fixed costs

Net Income / (Loss) $

$

$

Explanation / Answer

Hence since the net losses would increase;Bid Bart product line should be continued.

Continue Eliminate Net income increase(Decrease) Sales 201000 0 (201000) Variable costs 17500 0 175000 Contribution margin 26000 0 (26000) Fixed Costs 29600 19100 10500 Net income (3600) (19100) (15500)

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