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Top managers of Texas Flooring are alarmed by their operating losses. They are considering dropping the laminate flooring product line. Company accountants have prepared the following analys to help make this decision:
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Total fixed costs will not change if the company stops selling laminate flooring.
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Requirement Prepare an incremental analysis to show whether Texas Flooring should discontinue the laminate flooring product line. Will discontinuing laminate flooring add $ to operating income? Explain. Enter a in an input field if there is no expected change as a result of discontinuing the laminate flooring product in this scenario.
tableIncremental Analysis for Discontinuation Decision,Contribution margin lost if laminate flooring product line is dropped,Less: Fixed cost savings if laminate flooring product line is dropped,Operating income flaminate flooring is dropped,
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