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 $3,80 from sales $20·000 variable costs 17.00 and fixed costs $30,800. If the Big Bart line is eliminated, $20,800 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).) Net Income Increase (Decrease) Continue Eliminate Sales Variable costs Contribution margin Fixed costs Net Income / (Loss) s The Big Bart product line should be

Explanation / Answer

Decision making :

The big Bart proudct line should be continue.

Continue Eliminate Net income increase (decrease) Sales 201000 0 (201000) Variable costs (174000) 0 174000 Contribution margin 27000 0 (27000) Fixed cost (30800) (20800) 10000 Net income (loss) (3800) (20800) (17000)

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