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More info Fixed manufacturing overhead costs account for 40% of the cost of goods, while...

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Accounting

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More info Fixed manufacturing overhead costs account for 40% of the cost of goods, while only 30% of the operating expenses are fixed. Since the fruit and nuts line is just one of the company's fruit operations, only $730,000 of direct fixed costs (the majority of which is advertising) will be eliminated if the product line is discontinued. The remainder of the fixed costs will still be incurred by the company. Suppose Wheatum is considering discontinuing its fruit and nuts product line. Assume that during the past year, the fruit and nuts' product line income statement showed the following (Click the icon to view the income statement data.) (Click the icon for additional information.) If the company decides to discontinue the product line, what will happen to the company's operating income? Should Wheatum discontinue the fruit and nuts product line? Data table

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