Considering discontinuing his baseball coaching

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Michael has a program coaching football, basketball, and baseball. However, the baseball program is not doing very well and he is considering discontinuing his baseball coaching. If he does discontinue baseball coaching, he will be able to eliminate 60% of the fixed costs of baseball coaching, but the other 40% will continue.

                                              Football      Basketball   Baseball      Total.

Revenues                               $25,000      $30,000      $15,000      $70,000

Variable Costs                         $10,000      $15,000      $ 8,000      $33,000

Contribution Margin                   $15,000      $15,000      $ 7,000      $37,000

Fixed Costs                             $ 7,000      $ 4,000      $10,000      $21,000

Operating Income                    $ 8,000      $11,000      $ -3,000      $16,000

What will be the change to income if Michael discontinues baseball coaching?

show your calculations Should he discontinue baseball?

Reference no: EM13923556

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