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32. Carns Company is considering eliminating its Small Tools Division, which reported a loss for the prior year of $85,000 as shown below Carns Company
32. Carns Company is considering eliminating its Small Tools Division, which reported a loss for the prior year of $85,000 as shown below
Carns Company is considering eliminating its Small Tools Division, which reported a loss for the prior year of $85,000 as shown below Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,310,000 1,175,000 135,000 220,000 $ (85,000) If the Small Tools Division is dropped, all of its variable costs are avoidable, and $99,000 of its fixed costs are avoidable. The impact on Carns's income from eliminating the Small Tools Division would be: O A) $36,000 decrease B) $74,200 decrease C) $220,000 decrease O D) $99,000 decreaseStep by Step Solution
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