This preview shows pages 1–3. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: 220,000 115,000 105,000 Contribution margin 440,000 225,000 215,000 Fixed expenses: Cost of goods sold 317,000 232,000 a 85,000 Marketing and administrative expenses 65,000 52,000 b 13,000 Total fixed expenses 382,000 284,000 98,000 Operating income (loss) $ 58,000 $ (59,000 ) $117,000 __________ a $317,000 $85,000 b $ 65,000 $13,000 (continued) P 19-25A Req. 3 The operating income difference calculated in the total analysis of dropping a product line equals the expected decrease in operating income if Security Force drops the industrial systems product line, as shown in Req. 1. This demonstrates that the incremental analysis approach in Req. 1 yields the same result as the longer approach in Req. 2 that compares total operating income under the two alternatives....
View Full Document
- Spring '11