Blossom, Inc., manufactures golf clubs in three models. For the year, the Big Bart line has a net loss of $4,700 from sales $201,000, variable costs $175,000, and fixed costs $30,700. If the Big Bart line is eliminated, $19,800 of fixed costs will remain. Prepare an analysis showing whether the Big Bart line should be eliminated. (Enter negative amounts using either a negative sign preceding the number e. g. -45 or parentheses e. g. (45).) g

Analysis of the Big Bart line discontinuity

Opportunity Costs :

Sales                                                        ($201,000)

Savings :

Variable Costs                                          $175,000

Fixed Costs ($30,700 - $19,800)              $10,900

Financial Advantage / (Disadvantage)     ($15,100)

Conclusion :

Do not eliminate / discontinue Big Bart line.

Explanation:

The results show that closing Big Bart line results in a contribution towards fixed cost being lost to the amount of $15,100. Therefore leaving the entire company in a worse off position.

answer; is usually (less than) the socially optimal level of consumption;

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

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