What will be total net income if the line is dropped

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Reference no: EM13135282

Justin Industries produces three versions of tires: Supreme, Advanced, and Basic. A condensed segmented income statement for a recent period follows:
Supreme Advanced Basic Total
Sales $1,000,000 $400,000 $130,000 $1,530,000
Variable expenses 650,000 280,000 116,000 1,046,000
Contribution margin 350,000 120,000 14,000 484,000
Fixed expenses 150,000 70,000 44,000 264,000
Net income (loss) $200,000 $ 50,000 $(30,000) $220,000

Assume none of the fixed expenses for the Basic line are avoidable. What will be total net income if the line is dropped?
A) $250,000
B) $206,000
C) $210,000
D) $280,000

Reference no: EM13135282

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