What will total operating income be if brown drops

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Gary Brown Manufacturing makes single kayaks, double kayaks, and lightweight competitive kayaks. The double kayak line has been showing losses for several years, and management is considering dropping the line. Recent income statements have been very similar to the following information which was prepared for the most recent year:

Single

Double

Competitive

Total

Sales

$687,500

$400,000

$1,037,500

$2,125,000

Variable costs

446,875

272,000

850,750

1,569,625

Contribution margin

240,625

128,000

186,750

555,375

Fixed costs

156,250

162,500

143,750

462,500

Operating income

$84,375

$(34,500)

$43,000

$92,875

Of the fixed costs, $393,750 is common costs that have been allocated equally to each product line. What will total operating income be if Brown drops the double kayak line?

Reference no: EM131788478

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