Purchase Solution

Operating Income impact

Not what you're looking for?

Ask Custom Question

Require assistance in calculating operating income impacts.

The following product line information is for the Home Deal Company. The company is considering dropping its Children's product line due to poor operating income performance. Fixed expenses are allocated to each product line based on sales revenue.

............................................Active Wear Clothing
.....................................Men's....Women's.....Children's
Sales............................$15,000.... $25,000...... $20,000
Variable expenses............5,000........7,500.........12,500
Fixed expenses (50% of
sales)..............................7,500.......12,500........10,000
Operating income...........$2,500.......$5,000.......($2,500)

Required:
A) Calculate the effect on the Home Deal's operating income if the Children's active wear clothing line is discontinued. Comment on your analysis.
B) Assume Home Deal's discontinues its Children's active wear clothing line, calculate the total operating income.

Purchase this Solution

Solution Summary

Solution helps in calculating the effect on the Home Deal's operating income if the Children's active wear clothing line is discontinued

Solution Preview

Require assistance in calculating operating income impacts.

The following product line information is for the Home Deal Company. The company is considering dropping its Children's product line due to poor operating income performance. Fixed expenses are allocated to each product line based on sales revenue.

............................................Active Wear Clothing ...

Purchase this Solution


Free BrainMass Quizzes
Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.