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Copr. Goedl Fun Inc. has two product lines, toys and gag gifts. They are considering dropping the toys segment so they can focus on
Copr. Goedl Fun Inc. has two product lines, toys and gag gifts. They are considering dropping the toys segment so they can focus on gag gifts. Below is a segmented income statement for the toy segment. Sales Variable expenses Contribution margin - Administrative expense Toys segment income $ 180,000 96,000 84,000 87,000 $ (3,000) Sales and variable expenses are traceable directly to the toys segment. Of the administrative expenses $27,000 would be eliminated if the toys segment is dropped. If the toys segment were dropped, what would be the effect on the company related to sales? $(180,000) O $180,000 $0 O Not relevant to this decision
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