Maxley Markets Company sells logo sports merchandise and does custom embroidery. They are trying to decide whe?
Direct Fixed Costs
Allocated Common Fixed Costs
(a) What would be the impact on profits if embroidery was dropped?
(b) Assume that if embroidery was dropped, apparel sales would increase 20%. What is the impact on contribution margin and net income?
(c) Give an example of a cost that is not relevant in this analysis.