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MCS,MBA(IT), Pursuing PHD
Devry University
Sep-2004 - Aug-2010
Assistant Financial Analyst
NatSteel Holdings Pte Ltd
Aug-2007 - Jul-2017
(TCO H) Mr. Earl Pearl, accountant for Margie Knall, Inc. has prepared the following product-line income data.                                                                                   Â
PRODUCT
                                                               Total            A                B                     C
Sales................................................$ 100,000........$50,000.........$20,000...........$30,000
Variable expenses..............................  60,000..........30,000............10,000.............20,000
Contribution margin............................. .40,000..........20,000............10,000.............10,000
Fixed expenses:
   Rent................................................. .5,000...........2,500..............1,000...............1,500
   Depreciation..................................... 6,000...........3,000..............1,200................1,800
   Utilities.............................................4,000...........2,000.................500................1,500
   Supervisors' salaries.......................   5,000.......... 1,500.................500................3,000
    Maintenance....................................3,000...........1,500..................600..................900
   Administrative expenses................ 10,000...........3,000.................2,000..............5,000
Total fixed expenses........................ 33,000..........13,500...............5,800.............13,700
Â
Net operating income........................ $7,000..........$6,500.............$4,200............($3,700)
The additional information below is available.Â
ο The factory rent of $1,500 assigned to Product C is avoidable if the product is dropped.Â
ο The company's total depreciation would not be affected by dropping Product C.Â
ο Eliminating Product C will reduce the total monthly utility bill from $4,000 to $3,000.Â
ο All supervisory salaries for Product C would be avoidable.Â
ο If Product C is discontinued, the maintenance department will be able to reduce total monthly expenses from $3,000 to $2,200.Â
ο Elimination of Product C will make it possible to cut two persons from the administrative staff. Currently, their combined salaries total $2,500.Â
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