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autumnofsolace10
18.06.2021 •
Business
Assume that Tree Co. has the ability to discontinue both product lines and rent the factory space previously used for the production of Leaves and Bark. The factory space for Leaves can be rented out for $25,000 a year, and the factory space for Bark can be rented for $27,000 a year. Which product lines should Tree Co. discontinue and rent out instead?
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Ответ:
Both Leaves and Bark should be discontinued and rented out
Explanation:
Calculation to determine whether Both Leaves and Bark should be discontinued and rented out
LEAVES BARK
Sales eliminated $(30,000)$(50,000)
Variable costs eliminated $10,000 $25,000
Net loss from discontinuation($20,000)($25,000)
($-30,000+$10,000=-$20,000)
(-$50,000+$25,000=-$25,000)
Rental income gained $25,000 $27,000
Increase in operating income $5,000 $2,000
($25,000-$20,000=$5,000)
($27,000-$25,000=$2,000)
Therefore based on the above calculation both Leaves and Bark SHOULD BE DISCONTINUED reason been that the NET LOSS for each is LESSER than the annual rental income.
Ответ:
It’s because you have to look nice but if you don’t look nice then they won’t consider you to be responsible for the job. :)