Sardine Kitchen Company Produces Three Versions of Crock Pots: Small

Multiple Choice

Sardine Kitchen Company produces three versions of crock pots: small medium and large. A condensed segmented income statement for a recent period follows: $\begin{array}{lcccc}&\text { Large }&\text { Medium } & \text { Small }&\text { Total }\\ \text { Sales } & \$ 200,000 & \$ 200,000 & \$ 105,000 & \$ 505,000 \\ \text { Variable expenses } & 125,000 & 110,000 & 65,000 & 300,000 \\ \text { Contrbution margin } & 75,000 & 90,000 & 40,000 & 205,000 \\\text { Fixed expenses } & 55,000 & 55,000 & 47,000 & 157,000 \\ \text { Net income (loss) } & \$ 20,000 & \$ 35,000 & \$(7,000) & \$ 48,000 \\\end{array}$
Assume all of the fixed expenses for the small size crock pot are avoidable. What will be total net income if the line is dropped?

A) $55000
B) $47000
C) $95000
D) $10000