Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

B. Segment Elimination (Differential Analysis) The following is a consolidated Income Statement for TreeTop Pruning. GEOGRAPHIC SEGMENT PER MONTH Sharpstown Cypress Pasadena TOTAL Sales

image text in transcribed

B. Segment Elimination (Differential Analysis) The following is a consolidated Income Statement for TreeTop Pruning. GEOGRAPHIC SEGMENT PER MONTH Sharpstown Cypress Pasadena TOTAL Sales $20,000 $18,000 $12,000 $50,000 TVC (5,000) (2,000) (6,000) (13,000) TCM 15,000 16,000 6,000 37,000 FC: Salaries 2,000 2,000 2,000 6,000 Advertising 1,000 1,000 1,000 3,000 Administrative 1,000 1,000 2,000 4,000 Depreciation 500 800 1,000 2,300 Rent 1,000 1,500 5,000 7,500 Other 2,000 1,000 1,000 4,000 Total FC (7,500) (7,300) (12,000) (26,800) Net Income 7,500 8,700 (6,000) 8,200 19. If the Pasadena segment is eliminated, advertising, administrative, and rent will be eliminated entirely, and the rest of the Pasadena fixed costs will be decreased by 50%. Required: Calculate the net change in monthly Net Income for the consolidated entity if the Pasadena Office is eliminated.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

College Accounting Chapters 1-15

Authors: James Heintz

21st Edition

1285624815, 9781285624815

More Books

Students also viewed these Accounting questions

Question

=+1. Which of the given are Actions and which are States of Nature?

Answered: 1 week ago