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Gion Company is considering eliminating its Windows division, which reported a loss for the prior year of $90,000 as shown below. Segment Income (Loss) Sales
Gion Company is considering eliminating its Windows division, which reported a loss for the prior year of $90,000 as shown below. Segment Income (Loss) Sales Variable costs $ 1,115,000 980,000 Contribution margin 135,000 Fixed costs 225,000 $ (90,000) Income (loss) If the Windows division is dropped, all of its variable costs are avoidable, and $146,250 of its fixed costs are avoidable. The impact on Gion's operating income from eliminating this business segment would be: Multiple Choice $11,250 increase $10,450 decrease $146,250 decrease $146,250 increase $11,250 decrease
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