Hello, I have posted this question twice already and received two different answers. I hoped that someone could solve the problem above and show all their work so I can learn from it.

1st time: Hence Profit will drop by $66,000, resulting in a loss of $29,000.

2nd time: Current profits of all segments =

= ($4,000) + $11,000 + $30,000

= $37,000

Changes in profits =

= $37,000 - $50,000 - $20,000

= $37,000 - $70,000

= ($33,000)

1. The Party Zone is trying to decide whether or not to continue its costume segment. The information shown is available for Party Zone's business segments. Assume that neither the Direct fixed costs nor the Allocated common fixed costs may be eliminated, but will be allocated to the two remaining segments