Exercise 4-44(Algo) Dropping Product Lines (LO 4-4) Lamothe Kitchen and Bath makes products...
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Exercise Algo Dropping Product Lines LO Lamothe Kitchen and Bath makes products for the home, which it sells through major retailers and remodeling doityourself, or DIY outlets. One product that has had varying success is a ceiling fan for the kitchen. The fan comes in three sizes Inch, Inch, and Inch which are designed for various kitchen sizes and cooling requirements. The chief financial officer CFO at Lamothe has been looking at the segmented income statement for the fan and is concerned about the results for the inch model. If the Inch model is dropped, the revenue associated with it would be lost and the related variable costs saved. In addition, the company's total fixed costs would be reduced by percent. Required: a Prepare a differential cost schedule to support your recommendation. b Should Lamothe Kitchen and Bath should drop the Inch model product line? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Prepare a differential cost schedule to support your recommendation. Select option "increase" or "decrease", keeping Status Quo as the base. Select "none" if there is no effect. 
Exercise Algo Dropping Product Lines LO
Lamothe Kitchen and Bath makes products for the home, which it sells through major retailers and remodeling doityourself, or DIY
outlets. One product that has had varying success is a ceiling fan for the kitchen. The fan comes in three sizes Inch, Inch, and
Inch which are designed for various kitchen sizes and cooling requirements. The chief financial officer CFO at Lamothe has been
looking at the segmented income statement for the fan and is concerned about the results for the inch model.
If the Inch model is dropped, the revenue associated with it would be lost and the related variable costs saved. In addition, the
company's total fixed costs would be reduced by percent.
Required:
a Prepare a differential cost schedule to support your recommendation.
b Should Lamothe Kitchen and Bath should drop the Inch model product line?
Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Prepare a differential cost schedule to support your recommendation. Select option "increase" or "decrease", keeping Status
Quo as the base. Select "none" if there is no effect.
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