Corn Crunchers has three product lines.Its only unprofitable line is Corn Nuts the results of which appear below for 2022: $$\begin{array} { l r }
\text { Sales } & \$ 1,400,000 \
\text { Variable expenses } & 920,000 \
\text { Fixed expenses } & 600,000 \
\text { Net loss } & \$ ( 120,000 )
\end{array}$$ If this product line is eliminated 30% of the fixed expenses can be eliminated.How much are the relevant costs in the decision to eliminate this product line?

Question

Corn Crunchers has three product lines.Its only unprofitable line is Corn Nuts the results of which appear below for 2022: $$\begin{array} { l r } 
\text { Sales } & \$ 1,400,000 \
\text { Variable expenses } & 920,000 \
\text { Fixed expenses } & 600,000 \
\text { Net loss } & \$ ( 120,000 )
\end{array}$$ If this product line is eliminated 30% of the fixed expenses can be eliminated.How much are the relevant costs in the decision to eliminate this product line?

Quizplus · Accepted Answer

The Answer of Corn Crunchers has three product lines.Its only unprofitable line is Corn Nuts the results of which appear below for 2022: $$\begin{array} { l r } 
\text { Sales } & \$ 1,400,000 \
\text { Variable expenses } & 920,000 \
\text { Fixed expenses } & 600,000 \
\text { Net loss } & \$ ( 120,000 )
\end{array}$$ If this product line is eliminated 30% of the fixed expenses can be eliminated.How much are the relevant costs in the decision to eliminate this product line?

Corn Crunchers Has Three Product Lines If This Product Line Is Eliminated 30% of the Fixed