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A guitar manufacturer is considering eliminating its electric guitar division because its $91,930 expenses are higher than its $86,520 sales. The company reports the
A guitar manufacturer is considering eliminating its electric guitar division because its $91,930 expenses are higher than its $86,520 sales. The company reports the following expenses for this division. Cost of goods sold Direct expenses Indirect expenses Service department costs Should the division be eliminated? Avoidable Expenses Unavoidable Expenses $ 64,000 11,650 650 10,000 $1,250 1,800 2,580 Electric Guitar Division is: Kept Eliminated Sales 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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