Stretch Inc. sells both yoga pants and yoga mats. Managers for Stretch are concerned about their operating...

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StretchInc. sells both yoga pants and yoga mats. Managers for Stretch areconcerned about their operating losses. They are consideringdropping their yoga mat product line. Operating income by prouctline is shown below. Prepare a new operating income analysisassuming Stretch will only sell yoga pants. Then explain whyStretch should drop the yoga mat product line.
Stretch Inc.
Income Statement
For year ended December 31, 2017
Total Yoga Pants Yoga Mats
Sales Revenue $        425,000 $        299,000 $        126,000
Variable Costs           221,000           136,000             85,000
Contribution Margin           204,000           163,000             41,000
Fixed Costs:
Fixed Manufacturing           123,000             62,000             61,000
Selling & Administrative             58,000             46,000             12,000
Operating Income             23,000             55,000           (32,000)
Stretch Inc.
Income Statement
For year ended December 31, 2017
Total
Sales Revenue
Variable Costs
Contribution Margin
Fixed Costs:
Fixed Manufacturing
Selling & Administrative
Operating Income
Explanation:

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Requirement Stretch Inc Income Statement For year ended December 31 2017 Total Sales Revenue 299000 Variable Costs 136000 Contribution Margin 163000 Fixed Costs Fixed See Answer

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StretchInc. sells both yoga pants and yoga mats. Managers for Stretch areconcerned about their operating losses. They are consideringdropping their yoga mat product line. Operating income by prouctline is shown below. Prepare a new operating income analysisassuming Stretch will only sell yoga pants. Then explain whyStretch should drop the yoga mat product line.
Stretch Inc.
Income Statement
For year ended December 31, 2017

	Total	Yoga Pants	Yoga Mats
Sales Revenue	$ 425,000	$ 299,000	$ 126,000
Variable Costs	221,000	136,000	85,000
Contribution Margin	204,000	163,000	41,000
Fixed Costs:
Fixed Manufacturing	123,000	62,000	61,000
Selling & Administrative	58,000	46,000	12,000
Operating Income	23,000	55,000	(32,000)


Stretch Inc.
Income Statement
For year ended December 31, 2017
	Total
Sales Revenue
Variable Costs
Contribution Margin
Fixed Costs:
Fixed Manufacturing
Selling & Administrative
Operating Income

Explanation: