data storage inc offer web hosting and cloud
25. Dropping an Unprofitable Segment (6 Points) Data Storage Inc. (DSI) offers web hosting and cloud computing services to businesses and individual Management is concerned that offering services to individuals is negatively impacting total profit. The following information is available relative to DSI's financial position Youo an . (Y-X t. Revenue from businesses: $15,000,000 Contribution margin percentage from businessest: 40% Fixed Costs allocated to businesses: $3,000,000 Operating income/(loss) from businesses: $3,000,000 businesses: 40% fixeel cost T V Total (w ) Revenue from individuals: $1,000,000 Contribution margin percentage from individuals: (15%) Fixed Costs allocated to individuals: $350,000 Operating income/(loss) from individuals: ($500,000) Management at DSI believes that the storage capacity and other fixed resources currently used individual services could be used to service more businesses, and generate profits similar to cu business contracts. DSI believes that revenue from businesses could increase by $1,750,000 ar variable costs per unit, and fixed costs in total would remain the same. Required: a. What is the current operating income for DSI in total? Use the below chart to creat contribution margin income statement (calculate based on information above) $ CM Income Statement Sales - Variable Costs Contribution Margin - - Fixed Costs Income/(Loss) Businesses Individuals Total 15,000,000 $ 1,000,000 $ 16,000,00 90ouw loow 10, 150, uw 6000, u 150, w J. 8JU, ou 30o, vo isjoow.) 650, or Zwo w sw. 2, Juu h Ry how much would Operating Income increase or decrease in total if the in what would happen to our costs) 25. Dropping an Unprofitable Segment (6 Points) Data Storage Inc. (DSI) offers web hosting and cloud computing services to businesses and individual Management is concerned that offering services to individuals is negatively impacting total profit. The following information is available relative to DSI's financial position Youo an . (Y-X t. Revenue from businesses: $15,000,000 Contribution margin percentage from businessest: 40% Fixed Costs allocated to businesses: $3,000,000 Operating income/(loss) from businesses: $3,000,000 businesses: 40% fixeel cost T V Total (w ) Revenue from individuals: $1,000,000 Contribution margin percentage from individuals: (15%) Fixed Costs allocated to individuals: $350,000 Operating income/(loss) from individuals: ($500,000) Management at DSI believes that the storage capacity and other fixed resources currently used individual services could be used to service more businesses, and generate profits similar to cu business contracts. DSI believes that revenue from businesses could increase by $1,750,000 ar variable costs per unit, and fixed costs in total would remain the same. Required: a. What is the current operating income for DSI in total? Use the below chart to creat contribution margin income statement (calculate based on information above) $ CM Income Statement Sales - Variable Costs Contribution Margin - - Fixed Costs Income/(Loss) Businesses Individuals Total 15,000,000 $ 1,000,000 $ 16,000,00 90ouw loow 10, 150, uw 6000, u 150, w J. 8JU, ou 30o, vo isjoow.) 650, or Zwo w sw. 2, Juu h Ry how much would Operating Income increase or decrease in total if the in what would happen to our costs)
