contestada

Hava Racquets Company manufactures pickleball racquets in four different models.
For the year, the SoftNet line had a net loss of AED 40,000 from sales of AED 250,000,
variable costs of AED 180,000 and fixed costs of AED 110,000. If the Softnet is
eliminated, AED 30,000 of fixed cost will remain. What would be the incremental
effect to the Company if the Softnet would be eliminated?

Respuesta :

Parrain

Based on the AED 40,000 net loss that the SoftNet line brings to Hava Racquets company, the incremental effect if the Softnet line is eliminated is that the company would save AED 10,000.

What is the incremental effect?

If Hava Racquets Company decides to scrap the Softnet line, then it means that they will no longer be incurring the AED 40,000 net loss that the line had brought to them.

They would instead incur a fixed cost of AED 30,000 which they can apply to their other operations.

This means that in exchange for a AED 40,000 loss, they would instead get  a AED 30,000 loss.

The savings on these losses is:

= 40,000 - 30,000

= AED 10,000

This means that Hava Racquets Company will make a saving of AED 10,000 if they eliminate the line.

Find out more on incremental analysis at https://brainly.com/question/17215395

#SPJ1

Otras preguntas