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Granfield Company is considering eliminating its backpack division, which reported a loss for the recent year of $43,000 as shown below. Segment Income (Loss) Sales
Granfield Company is considering eliminating its backpack division, which reported a loss for the recent year of $43,000 as shown below. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 964,000 477,000 487,000 530,000 $ (43,000) If the backpack division is dropped, all $477,000 of its variable costs are avoidable, and $212,000 of its fixed costs are avoidable. The impact on Granfield's income from eliminating this business segment would be:
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