Top managers of Carolina Flooring are alarmed by their operating losses. They are considering dropping the laminate flooring product line. Company accountants have prepared the following analysis to help make this decision: View the analysis.
Total fixed costs will not change if the company stops selling laminate flooring.
Read the requirements.
Requirement Prepare an incremental analysis to show whether Carolina Flooring should discontinue the laminate flooring product line. Will discontinuing laminate flooring add $ to operating income? Explain.
Discontinuing laminate flooring will cause operating income to
Decisior
It is to conclude that dropping laminate flooring would add $ to operating income. If the company discontinues the laminate flooring product line, it incur fixed expenses allocated to laminate flooring. show whether the company should stop selling laminate flooring. Enter a in an input field if there is no expected change as a result of discontinuing the laminate flooring in this scenario.
Discontinuing laminate flooring and avoiding $ of fixed expenses, will cause operating income to
Decision: because, assuming $ of fixed expenses attributable to the laminate flooring product line can be avoided, the loss of contribution margin the fixed cost savings.
Requirement Now, assume that all of the fixed costs assigned to laminate flooring are direct fixed costs and can be avoided if the company stops selling laminate flooring. However, marketing has concluded that wood flooring sales would be adversely affected by discontinuing the laminate flooring line retailers want to buy both from the same supplier Wood flooring production and sales would decline What should the company do
Prepare an incremental analysis. Enter a in an input field if there is no expected change as a result of discontinuing the laminate flooring line in this scenario.
Discontinuing laminate flooring and avoiding all fixed expenses, will cause operating income to
Decision: because, assuming that all fixed costs assigned to the laminate flooring product line can be avoided but that wood flooring production and sales would decline the loss of contribution margin the fixed cost savings.
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by their operating losses. They are considering dropping the laminate flooring product line. Company accountants have prepare
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Analysis
Top managers of Carolina Flooring are alarmed by their operating losses. They are considering dropping the laminate flooring product line. Company accountants have prepared the following analysis to help make this decision: Lewthe analvsis
Total fixed costs will not change if the company stops selling laminate flooring.
Read the requirements.
Requirement Prepare an incremental analysis to show whether Carolina Flooring should discontinue the laminate flooring product line. Will discontinuing laminate flooring add $ to operating income? Explain.
Discontinuing laminate flooring will cause operating income to
Decision: Drop laminate flooring product line.
It is to conclude that dropping laminate flooring would add $ to operating income. If the company discontinues the laminate flooring product line, it incur fixed expenses allocated to laminate flooring.
Requirement Assume that the company can avoid $ of fixed expenses by discontinuing the laminate flooring product line these costs are direct fixed costs of the laminate flooring product line Prepare an incremental analysi show whether the company should stop selling laminate flooring. Enter a in an input field if there is no expected change as a result of discontinuing the laminate flooring in this scenario.
Discontinuing laminate flooring and avoiding $ of fixed expenses, will cause operating income to
savings. because, assuming $ of fixed expenses attributable to the laminate flooring product line can be avoided, the loss of contribution margin the fixed cost
Prepare an incremental analysis. Enter a in an input field if there is no expected change as a result of discontinuing th
