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Carns Company is considering eliminating its Small Tools Division, which reported a loss for the prior year of $255,000 as shown below. Segment Income (Loss)
Carns Company is considering eliminating its Small Tools Division, which reported a loss for the prior year of $255,000 as shown below. Segment Income (Loss) Sales $1,480,000 Variable costs 1,345,000 Contribution margin 135,000 Fixed costs. 390,000 Income (loss) \$(255,000) If the Small Tools Division is dropped, all of its variable costs are avoidable, and $117,000 of its fixed costs are avoidable, The impact on Carns's income from eliminating the Small Tools Division would be: $390,000 decrease $18,000 decrease $39,900 decrease $117,000 decrease $18,000 increase
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