Braxton Company has three divisions Golf, Baseball, and Soccer Sales in each division last year were as follows Golf $80,000 Baseball $100,000 Soccer $60,000 The segment margin amounts for each division last year were as follows Golf $25,000 Baseball $40,000 Soccer ($5,000) Company management is considering dropping the Soccer segment because it generated a loss Which of the following statements is true Multiple Choice Braxton Company will be financially worse off by $60,000 if it drops the Soccer segment, assuming sales and expenses in the Golf and Baseball segments will not be affected by this move Braxton Company will be financially better off by $5,000 if it drops the Soccer segment, assuming sales and expenses in the Golf and Baseball segments will not be affected by this move Braxton Company will be $5,000 worse off if it drops the Soccer segment, assuming sales and expenses in the Golf and Baseball segments will not be affected by this move Braxton Company will be financially better off by $60,000 if it drops the Soccer segment, assuming sales and expenses in the Golf and Baseball segments will not be affected by this move

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 18, 2024

Braxton Company has three divisions: Golf, Baseball, and Soccer.

Sales in each division last year were as follows: Golf $80,000; Baseball $100,000; Soccer $60,000.

The segment margin amounts for each division last year were as follows: Golf $25,000; Baseball $40,000; Soccer ($5,000).

Company management is considering dropping the Soccer segment because it generated a loss.

Which of the following statements is true?

Multiple Choice

Braxton Company will be financially worse off by $60,000 if it drops the Soccer segment, assuming sales and expenses in the Golf and Baseball segments will not be affected by this move.
Braxton Company will be financially better off by $5,000 if it drops the Soccer segment, assuming sales and expenses in the Golf and Baseball segments will not be affected by this move.
Braxton Company will be $5,000 worse off if it drops the Soccer segment, assuming sales and expenses in the Golf and Baseball segments will not be affected by this move.
Braxton Company will be financially better off by $60,000 if it drops the Soccer segment, assuming sales and expenses in the Golf and Baseball segments will not be affected by this move.