The division manager of Division B received the following operating income data for the past? year:
The division manager of Division B received the following operating income data for the past year:
Division B of Deisel, Inc.
Income Statement
For the Year Ended December 31, 2018
Product Line
T205
B179
Total
Net Sales Revenue
$370,000
$390,000
$760,000
Cost of Goods Sold:
Variable
41,000
39,000
80,000
Fixed
250,000
68,000
318,000
Total Cost of Goods Sold
291,000
107,000
398,000
Gross Profit
79,000
283,000
362,000
Selling and Administrative Expenses:
Variable
61,000
76,000
137,000
Fixed
56,000
20,000
76,000
Total Selling and Administrative Expenses
117,000
96,000
213,000
Operating Income (Loss)
$(38,000)
$187,000
$149,000
2a. Prepare a differential analysis to show whether Division B should drop the T205 product line. (Enter decreases to profits with a parentheses or minus sign.)
