A segment of a company reports the following loss for the year. All $140,000 of its variable
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A segment of a company reports the following loss for the year. All $140,000 of its variable costs are avoidable, and $75,000 of its fixed costs are avoidable.
(a) Compute the income increase or decrease from eliminating this segment.
(b) Should the segment be eliminated?
Transcribed Image Text:
Segment Income (Loss) Sales .... $200,000 Variable costs ..... 140,000 Contribution margin ..... 60,000 Fixed costs ... 80,000 Income (loss).... $ (20,000)
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a The total avoidable costs for the segment are Avoidable variable costs 14000...View the full answer
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