Complete the table to compare the effects of dropping the ski line of products. Enter all amounts as positive numbers except for a net loss. If an amount is zero, enter "0". The cost data for the each department is shown below.
|
Snowboards |
Skateboards |
Skis |
| Sales |
$175,000 |
$180,000 |
$160,000 |
| Less: variable expenses |
70,000 |
36,000 |
56,000 |
|
Contribution margin |
$105,000 |
$144,000 |
$104,000 |
| Less: fixed expenses: |
|
|
|
|
Salaries |
$61,250 |
$63,000 |
$64,000 |
|
Depreciation |
14,000 |
27,000 |
32,000 |
|
Advertising |
4,000 |
9,000 |
48,000 |
| Net income (loss) |
$25,750 |
$45,000 |
$-40,000 |
|
Alternatives |
Differential Effect |
|
Keep |
Drop |
Increase/Decrease |
| Sales |
$ |
|
|
|
$ |
|
| Less: variable expenses |
|
|
|
|
|
|
| Contribution margin |
$ |
|
|
|
$ |
|
| Less: fixed expenses: |
|
|
|
|
|
|
| Salaries |
$ |
|
$ |
|
$ |
|
| Depreciation |
|
|
|
|
|
|
| Advertising |
|
|
|
|
|
|
| Net income (loss) |
$ |
|
$ |
|
$ |
|