Blossom Trivia Co. manufactures and sells two trivia products, the Square Trivia Game and the Round Trivia Game. Last quarter'soperating profits, by product, and for the company as a whole, were as follows:SquareRoundTotalSales revenue$11,000$6,600$17,600Variable expenses4,4002,9007,300Contribution margin6,6003,70010,300Fixed expenses2,7504,2006,950Operating income$ 3,850$(500)$ 3,350Forty percent of the Round Game's fixed costs could have been avoided if the game had not been produced or sold.If the Round Game had been discontinued before the last quarter, what would operating income have been for the company as awhole?Operating income without round $

Unavoidable fixed costs for Round = $4,200 x 60% = $2,520

Answered: Blossom Trivia Co. manufactures and…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 29E

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Ivanhoe Trivia Co. manufactures and sells two trivia products, the Square Trivia Game and the Round Trivia Game. Last quarter’s operating profits, by product, and for the company as a whole, were as follows: Square Round Total Sales revenue $12,800 $6,670 $19,470 Variable expenses 4,980 2,930 7,910 Contribution margin 7,820 3,740 11,560 Fixed expenses 2,810 4,200 7,010 Operating income $ 5,010 $(460 ) $ 4,550 Forty percent of the Round Game’s fixed costs could have been avoided if the game had not been produced or sold.If the Round Game had been discontinued before the last quarter, what would operating income have been for the company as a whole? Operating income without round $ _______
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