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A guitar manufacturer is considering eliminating its electric guitar division because its $106,140 expenses are higher than its $100,790 sales. The company reports the following
A guitar manufacturer is considering eliminating its electric guitar division because its $106,140 expenses are higher than its $100,790 sales. The company reports the following expenses for this division. Unavoidable Expenses Cost of goods sold Direct expenses Indirect expenses Service department costs Avoidable Expenses $ 78,500 9,450 1,010 11,600 $1,650 1,850 2,080 Should the division be eliminated? 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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