20 acct questions 2

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Sunland Corporation manufactures several types of accessories. For the year, the gloves and mittens line had sales of $488,000, variable expenses of $369,000, and �xed expenses of $149,000. Therefore, the gloves and mittens line had a net loss of $30,000. If Sunland eliminates the line, $42,000 of �xed costs will remain. Prepare an analysis showing whether the company should eliminate the gloves and mittens line. (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) $ $ $

221 Exam 3 Ch 22-25

Question 8 of 20 - / 7.5

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The analysis indicates that Sunland should the gloves and mittens line.

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221 Exam 3 Ch 22-25

Question 8 of 20 - / 7.5