Complete the table to compare the effects of dropping the ski line of products. Enter all amounts as positive numbers except for a net loss. If an amount is zero, enter "0". The cost data for the each department is shown below.
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Snowboards
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Skateboards
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Skis
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Sales
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$175,000
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$180,000
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$160,000
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Less: variable expenses
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70,000
|
36,000
|
56,000
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Contribution margin
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$105,000
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$144,000
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$104,000
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Less: fixed expenses:
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Salaries
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$61,250
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$63,000
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$64,000
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Depreciation
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14,000
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27,000
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32,000
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Advertising
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4,000
|
9,000
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48,000
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Net income (loss)
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$25,750
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$45,000
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$-40,000
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Alternatives
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Differential Effect
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Keep
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Drop
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Increase/Decrease
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Sales
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$
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$
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Less: variable expenses
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|
|
|
|
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Contribution margin
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$
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|
|
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$
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Less: fixed expenses:
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|
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|
|
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Salaries
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$
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$
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$
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Depreciation
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|
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|
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Advertising
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|
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Net income (loss)
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$
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$
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$
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