ch12-AFM102s2012

Line is digital digital dropped the company dropped

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ropped, the company W atches W atches gives up its contribution gives up its contribution Sales $ 500,000 $ margin. margin. Less variable expenses: Manufacturing expenses 120,000 On the other hand, the general factory On the other hand, the general factory Shipping 5,000 overhead would be the same. So this overhead would be the same. So75,000 this Commissions cost really isn’t relevant. 200,000 cost really Total variable expensesisn’t relevant. Contribution margin 300,000 Less fixed we wouldn’t need a manager for But we wouldn’t need a manager for But expenses: General factory overhead anymore. 60,000 60,000 tthe product line anymore. he product line Salary of line manager 90,000 Depreciation 50,000 50,000 Advertising - direct 100,000 Rent - factory space IIff the digital watch line is dropped, the 70,000 the digital watch line is dropped, the net book value net book value General admin. expenses 30,000 30,000 off the equipment would be written off. The o theexpenses equipment would...
View Full Document

This test prep was uploaded on 04/09/2014 for the course AFM 102 at Waterloo.

Ask a homework question - tutors are online