Brislin Company makes and sells two products, Olives and Popeyes. The income statement for the prior year, 2001, was as follows:OlivesPopeyesSales$16,000$24,000Variable cost of goods sold6,00010,000Manufacturing contribution margin$10,000$14,000Fixed production5,0007,000Variable selling and administration2,0005,000Fixed selling and administration1,0003,000Net income$2,000($1,000)Brislin’s fixed costs are unavoidable and are allocated to products on the basis of sales revenue. If Popeyes are dropped, sales of Olives are expected to increase by 40 percent next year. What is the best decision of the company?
Originally posted 2018-07-07 18:53:17. Republished by Blog Post Promoter