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Sardine Kitchen Company Produces Three Versions of Crock Pots: Small

Question 84

Multiple Choice

Sardine Kitchen Company produces three versions of crock pots: small medium and large. A condensed segmented income statement for a recent period follows:  Large  Medium  Small  Total  Sales $200,000$200,000$105,000$505,000 Variable expenses 125,000110,00065,000300,000 Contrbution margin 75,00090,00040,000205,000 Fixed expenses 55,00055,00047,000157,000 Net income (loss)  $20,000$35,000$(7,000) $48,000\begin{array}{lcccc}&\text { Large }&\text { Medium } & \text { Small }&\text { Total }\\ \text { Sales } & \$ 200,000 & \$ 200,000 & \$ 105,000 & \$ 505,000 \\ \text { Variable expenses } & 125,000 & 110,000 & 65,000 & 300,000 \\ \text { Contrbution margin } & 75,000 & 90,000 & 40,000 & 205,000 \\\text { Fixed expenses } & 55,000 & 55,000 & 47,000 & 157,000 \\ \text { Net income (loss) } & \$ 20,000 & \$ 35,000 & \$(7,000) & \$ 48,000 \\\end{array}
Assume all of the fixed expenses for the small size crock pot are avoidable. What will be total net income if the line is dropped?


A) $55000
B) $47000
C) $95000
D) $10000

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