Gator Corporation manufactures several types of accessories. For the year, the gloves and mittens line had sales of $503,690, variable expenses of $372,430, and fixed expenses of $140,550. Therefore, the gloves and mittens line had a net loss of $9,290. If Gator eliminates the line, $41,120 of fixed 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 mce_markernbsp; mce_markernbsp; mce_markernbsp;
Variable costs
Contribution margin
Fixed costs
Net income mce_markernbsp; mce_markernbsp; mce_markernbsp;
The analysis indicates that Gator should
the gloves and mittens line.