Lisah, Inc., manufactures golf clubs in three models. For the year, the Big Bart

Question

Lisah, Inc., manufactures golf clubs in three models. For the year, the Big Bart line has a net loss of $3,800 from sales $201,000, variable costs $175,000, and fixed costs $29,800. If the Big Bart line is eliminated, $19,700 of fixed costs will remain. Prepare an analysis showing whether the Big Bart line should be eliminated. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Continue Eliminate Net Income Increase (Decrease) Sales $ $ $ Variable costs Contribution margin Fixed costs Net Income / (Loss) $ $ $ The Big Bart product line should be .

Explanation / Answer

Answer:

The Big Bart product line should be eliminated.

Particulars Continue eliminate Net income Increase (Decrease) Sales 201000 201000 Variable costs 175000 175000 Contribution margin 26000 26000 Fixed costs 29800 19700 10100 Net income -3800 -19700 15900

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