ACCT 610-The remaining fixed expenses are considered | Online Assignment Help: +1 (857)-330-4622

ACCT 610-The remaining fixed expenses are considered

ACCT 610-The remaining fixed expenses are considered The remaining fixed expenses are considered to be corporate-wide expenses that have been allocated to each product line based on sales revenue.The company is concerned about the performance of product A, and you have been asked to analyze the situation and recommend to the president whether to continue or discontinue the product. During your investigation, you discover that certain fixed expenses are traceable directly to each product line as indicated here:The segmented income statement for XYZ Company for the year ended December 31, 2016, follows:XYZ CompanySegmented Income StatementFor the year ended 12/31/2016Total CompanyProduct AProduct BProduct CSales615000306000123000186000variable expenses2760001500005500071000contribution margin33900015600068000115000fixed expenses2800001620004200076000Operating income59000(6000)2600039000The company is concerned about the performance of product A, and you have been asked to analyze the situation and recommend to the president whether to continue or discontinue the product. During your investigation, you discover that certain fixed expenses are traceable directly to each product line as indicated here:Total CompanyProduct AProduct BProduct CDirect Fixed Expenses106000760001100019000The remaining fixed expenses are considered to be corporate-wide expenses that have been allocated to each product line based on sales revenue.a) What will be the effect of the decision to discontinue product A on operating income?Operating income will _______ by ___________ for the XYZ Company if it discontinues Product Ab) Assume that product A is discontinued. Prepare a segmented income statement for the remaining products. Allocate corporate-wide fixed expenses as described. (Round intermediate calculations to 2 decimal places.)Total companyProduct BProduct CSalesVariable expensesContribution Margindirect fixed expensescommon fixed expensesoperating income/lossc) Starting with the segmented income statement, use the information you discovered during your investigation to present a more appropriately designed segmented income statement.Total CompanyProduct AProduct BProduct CSalesVariable ExpensesContribution MarginDirect Fixed expensessegment margincommon fixed expensesoperating income/loss