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Onxy Onxy
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6 years ago
The managerial accountant at the Vitamin and Mineral Shoppe prepared the following income statement for the most current year:

   Vitamin A   Vitamin E   Vitamin B   Total
Sales   $50,000   $90,000   $45,000   $185,000
Cost of goods sold   24,000   55,000   25,000   $104,000
Contribution margin   $26,000   $35,000   $20,000   $81,000
Order and delivery processing   18,000   20,000   7,500   45,500
Rent (per sq. foot used)   1,900   1,000   2,800   5,700
Allocated corporate costs   6,800   6,800   6,800   20,400
Corporate profit    $ (700)   $7,200   $2,900   $9,400

If the manager had discontinued the Vitamin A product line prior to this year, how would that impact the corporate profits?
Textbook 
Managerial Accounting: Decision Making and Motivating Performance

Managerial Accounting: Decision Making and Motivating Performance


Edition: 1st
Authors:
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lordingtonlordington
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6 years ago
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More solutions for this book are available here
The Vitamin A product line contributed $4,100 toward corporate profits. Without the Vitamin A product, corporate profits would be $4,100 less than currently reported.
Explanation:  Vitamin A product line discontinued [($50,000 - $24,000 - $18,000 - $1,900)] = $6,100
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Onxy Author
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6 years ago
this is exactly what I needed
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I appreciate what you did here, answered it right Smiling Face with Open Mouth
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Thanks
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