Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A segment of a company reports the following loss for the year. All $192,500 of its variable costs are avoidable, and $96,000 of its fixed
A segment of a company reports the following loss for the year. All $192,500 of its variable costs are avoidable, and $96,000 of its fixed costs are avoidable. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $275,000 192,500 82,500 104,000 (21,500) (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be eliminated? Complete this question by entering your answers in the tabs below. Required A Required B Compute the income increase or decrease from eliminating this segment. Segment Elimination Analysis Income Increase (Decrease) Sales Variable costs Contribution margin Fixed costs Continue Eliminate $ 275,000 $ 192,500 82,500 0 104,000 (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be eliminated? Complete this question by entering your answers in the tabs below. Required A Required B Compute the income increase or decrease from eliminating this segment. Income Increase (Decrease) Segment Elimination Analysis Continue Eliminate Sales $ 275,000 $ 0 Jariable costs 192,500 Contribution margin 82,500 ixed costs 104,000 come (loss) $ (21,500) 13,500 Required A Required B > (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be eliminated? Complete this question by entering your answers in the tabs below. Required A Required B Should the segment be eliminated? Should the segment be eliminated? Yes, segment should be eliminated
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started