Carla Vista Corporation manufactures several types of accessories. For the year, the gloves and mittens line had sales of $505,000,
variable expenses of $368,000, and fixed expenses of $148,000. Therefore, the gloves and mittens line had a net loss of $11,000. If
Carla Vista eliminates the line, $45,000 of fixed costs will remain. Prepare an analysis showing whether the company should eliminate
the gloves and mittens line. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Sales
Variable costs
Contribution margin
Fixed costs
Continue
Eliminate
Net Income
Increase (Decrease)
$
$
$
Net income / (Loss)
$
$
$
The analysis indicates that Carla Vista should
the gloves and mittens line.