three product lines in its retail stores: soccer balls, baseballs, and tennis balls. Results of the...

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Accounting

three product lines in its retail stores: soccer balls,baseballs, and tennis balls. Results of the fourth quarter arepresented below: Soccer Balls Baseballs Tennis Balls Total Unitssold 1,000 2,000 2,000 5,000 Revenue $22,000 $40,000 $23,000$85,000 Variable departmental costs 15,000 22,000 12,000 49,000Direct fixed costs 1,000 3,000 2,000 6,000 Allocated fixed costs8,000 8,000 8,000 28,000 Net income (loss) $ (2,000) $ 7,000 $1,000 $ 6,000 The allocated fixed costs cannot be avoided. Therewill be no changes in the demand of individual products caused bychanges in other product lines. Instructions What will happen toprofits if Holly Sportsballs discontinues the Soccer Balls productline?

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If soccer balls product line is discontinued the net income will reduce by 6000 that is the segment income on soccer ball product line The income will reduce because even though the company will save See Answer

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