Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Aladdin's Gyrocery has two product segments: falafel and gyros. Data for each product segment is as follows: Units sold Revenue Variable Costs Traceable Fixed
Aladdin's Gyrocery has two product segments: falafel and gyros. Data for each product segment is as follows: Units sold Revenue Variable Costs Traceable Fixed Costs Allocated Fixed Costs Total Gyros Falafel 9,500 6,300 $85,500 $37,800 $38,000 $19,900 $19,000 $12,500 $7,000 $6,500 $21,500 -$1,100 Aladdin's is considering dropping the falafel segment. If it is dropped, 28% of allocated fixed costs are avoidable and 100% of traceable fixed costs are avoidable. In addition, if the segment is dropped, Aladdin's can sell special equipment used to make falafel for $710. If the Falafel segment is dropped, what will the new net operating income be? Round your answer to the nearest dollar.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
1 Change in Revenue The revenue from the falafel segment is 37800 which will be eliminated if the se...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