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Managerial Accounting

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Ida Co. Drop a Product Line: Change in Profits

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Ida Co. has the following product line results for the most recent period:

Ida Co. Silky Plush Cotton Total
Sales \$150,000 \$170,000 \$180,000 \$500,000
Variable costs \$75,000 \$119,000 \$111,600 \$305,600
Fixed costs \$60,000 \$70,000 \$80,000 \$210,000
Operating Profit \$15,000 (\$19,000) (\$11,600) (\$15,600)

Ida Co. is trying to eliminate the loss.

What will be the change to Ida Co.'s total profits if the Cotton product line is eliminated, assuming that 80% of Cotton's fixed costs are avoidable?