Corn Crunchers has three product lines. Its only unprofitable line is Corn Nuts, the results of which appear below for 2017: $$\begin{array} { l r }
\text { Sales } & \$ 1,400,000 \
\text { Variable expenses } & 920,000 \
\text { Fixed expenses } & 600,000 \
\text { Net loss } & \$ ( 120,000 )
\end{array}$$ If this product line is eliminated, 30% of the fixed expenses can be eliminated. How much are the relevant costs in the decision to eliminate this product line?
A)$180,000
B)$1,520,000
C)$1,340,000
D)$1,100,000

Question

Corn Crunchers has three product lines. Its only unprofitable line is Corn Nuts, the results of which appear below for 2017: $$\begin{array} { l r } 
\text { Sales } & \$ 1,400,000 \
\text { Variable expenses } & 920,000 \
\text { Fixed expenses } & 600,000 \
\text { Net loss } & \$ ( 120,000 )
\end{array}$$ If this product line is eliminated, 30% of the fixed expenses can be eliminated. How much are the relevant costs in the decision to eliminate this product line?
A)$180,000
B)$1,520,000
C)$1,340,000
D)$1,100,000

Quizplus · Accepted Answer

The Answer of Corn Crunchers has three product lines. Its only unprofitable line is Corn Nuts, the results of which appear below for 2017: $$\begin{array} { l r } 
\text { Sales } & \$ 1,400,000 \
\text { Variable expenses } & 920,000 \
\text { Fixed expenses } & 600,000 \
\text { Net loss } & \$ ( 120,000 )
\end{array}$$ If this product line is eliminated, 30% of the fixed expenses can be eliminated. How much are the relevant costs in the decision to eliminate this product line?
A)$180,000
B)$1,520,000
C)$1,340,000
D)$1,100,000

Corn Crunchers Has Three Product Lines If This Product Line Is Eliminated, 30% of the Fixed