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A guitar manufacturer is considering eliminating its electric guitar division because its $86,210 expenses are higher than its $80,540 sales. The company reports the following
A guitar manufacturer is considering eliminating its electric guitar division because its $86,210 expenses are higher than its $80,540 sales. The company reports the following expenses for this division.
A guitar manufacturer is considering eliminating its electric guitar division because its $86,210 expenses are higher than its $80,540 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 $ 62,000 10,450 830 7 7,000 $ 2,650 1,650 1,630 Should the division be eliminated? (Any loss amount should be indicated with minus sign.) 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 byStep by Step Solution
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