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Based on the segment income statement below, Chips, Incorporated is considering eliminating its Barbecue Division line. Revenue from Barbecue Division sales $ 508,000 Salaries for
Based on the segment income statement below, Chips, Incorporated is considering eliminating its Barbecue Division line. Revenue from Barbecue Division sales $ 508,000 Salaries for Barbecue Division workers (108,000) Direct material (312,000) Sunk costs (equipment depreciation) (77,000) Allocated company-wide facility-sustaining costs (54,000) Net loss $ (43,000) If Barbecue Division were eliminated, profitability would Multiple Choice decrease $88,000. decrease $23,000. increase $531,000. increase $23,000
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