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Sherman Hats,Inc Assuming the Football Helmets Line Is Dropped,total Fixed Costs Remain

question 149

Multiple Choice

Sherman Hats,Inc.has two product lines-batting helmets and football helmets.The income statement data for the most recent year is as follows: $\begin{array} { | l | r | r | r | } \hline & { \text { Total } } & \text { Batting Helmets } & \text { Football Helmets } \\\hline \text { Sales revenue } & \$ 1,050,000 & \$ 700,000 & \$ 350,000 \\\hline \text { Variable costs } & \underline { ( 500,000) } & ( 200,000 ) & ( 300,000 ) \\\hline \text { Contribution margin } & \$ 550,000 & \$ 500,000 & \$ 50,000 \\\hline \text { Fixed costs } & ( 182,000 ) &( 90,000 ) & ( 92,000 ) \\\hline \text { Operating income (loss) } & \$ 368,000 & \$ 410,000 & \$ ( 42,000 ) \\\hline\end{array}$ Assuming the football helmets line is dropped,total fixed costs remain unchanged,and the space formerly used to produce the line is rented for $120,000 per year,how will operating income be affected?

Recognize the importance of diversity and cultural differences in conflict situations.

Understand the role of individual personality traits in conflict and conflict resolution.

Identify the impact of resource limitations on conflict.

Understand the communication flow within organizations and its impact on conflict resolution.

Definitions:

Disbursements

Money paid out by a business or an organization for various purposes, including expenses, investments, and dividends.

Optimal Initial Cash Balance

The ideal amount of cash that a company should hold at the start of a period to efficiently meet its operational needs and investment opportunities, while minimizing holding and shortage costs.

Transferring Funds

Transferring funds involves moving money from one account to another, either within the same financial institution or across different institutions.

Optimal Initial Cash Balance

The ideal amount of money a business should hold at the start to minimize costs while avoiding liquidity issues.