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  3. 1 2 company has three products product 101. produc

1 2 company has three products Product 101. Product 102 and Product 103. Income statements...

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Accounting

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1 2 company has three products Product 101. Product 102 and Product 103. Income statements of the three product lines for the latest month are given below. GHI Company has three product lines. The company is considering dropping Product K because it has been operating at a loss. The following summarizes the income of the three product lines. Are you going to drop Product K? Product Line Sales Variable Costs Contribution Margin Direct Fored Costs Allocated Foxed Costs Net income 101 $747,000 531,000 $216.000 98.000 83.000 $35.000 102 $624 000 469,000 $155,000 89,000 68.000 - $2.000 103 $878,000 611,000 $267,000 112,000 118,000 $37 000 Sales Product J Product K Product L Total $25.000 $32,000 $47.000 $104.000 12.000 15.000 24.000 51 000 $13.000 $17.000 $23.000 $53.000 Less: Variable Costs Contribution Margin Less Fixed Costs Traceable 5.000 8000 15.000 4.500 13.500 Use the incremental approach to determine if how much is the decrease in the overall el the company product 102 will be dropped Allocated Net Income $ 6000 $ 2.500 $ 8.000 S 11 500

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