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A guitar manufacturer is considering eliminating its electric guitar division because its $95,600 expenses are higher than its $88,510 sales. The company reports the following
A guitar manufacturer is considering eliminating its electric guitar division because its $95,600 expenses are higher than its $88,510 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 $ 66,000 10,950 620 10,600 $2,550 2,600 2,280 Should the division be eliminated? (Any loss amount should be indicated with minus sign.) Kept Eliminated Electric Guitar Division is: 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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