Pottery unlimited has two product lines cups and pitchers, Ask an Expert

Accounting

Pottery Unlimited has two product lines: cups and pitchers. Income statement data for the most recent year follow:

	Total	Cups	Pitchers
Sales revenue	$460,000	$310,000	$150,000
Variable expenses	355,000	235,000	120,000
Contribution margin	105,000	75,000	30,000
Fixed expenses	76,000	38,000	38,000
Operating income (loss)	$29,000	$37,000	$(8,000)

If $26469 in fixed costs will be eliminated by dropping the Pitcher line, how will operating income be affected? If income drops, use a negative sign in front of the number.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9966359

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