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A guitar manufacturer is considering eliminating its electric guitar division because its $76,000 expenses are higher than its $72,000 sales. The company reports the following
A guitar manufacturer is considering eliminating its electric guitar division because its $76,000 expenses are higher than its $72,000 sales. The company reports the following expenses for this division. Avoidable Unavoidable Expenses $56,000 Expenses Cost of goods sold Direct expenses Indirect expenses Service department costs $1,250 1,600 9,250 470 6,000 1,430 Should the division be eliminated? Electric Guitar Division is: Kept Eliminated Sales Expenses: Total expenses Total expenses Net income (loss) Revenues from electric guitar division Avoidable expenses Revenues are greater than (less than) avoidable expenses by
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