Kappa Company is deciding whether or not to drop one of its production departments, currently reporting a loss of $45,000. The loss consists of an $80,000 contribution margin and fixed expenses of $125,000. If the department is dropped, $70,000 of the fixed expenses would be eliminated. The financial advantage (disadvantage) to Kappa of dropping the department is O ($ 10,000) ($25,000) $ 70,000 $ 45,000 5 points One of the products manufactured by Alpha Corporation in its joint processing operation is 10,000 pounds of Powder. Alpha can sell the Powder at the split off point or process it further into Super-Powder. Additional information is presented below: Per unit selling price Additional processing Per unit selling price after at split off costs further processing $4 per pound $35,000 $10 per pound Powder What is the financial advantage (disadvantage) of further processing the Powder further into Super Powder rather than selling it the split off point? $60,000 ($35,000) $25.000 $65.000 6 5 points Beta Company has two divisions, Wizards and Wands, Beta is considering discontinuing Wands, due to the division's continuing operating losses. Beta's current income statement is presented below. If Wands is discontinued, all employees of the division will be laid off. General expenses are allocated based on sales dollars and are not directly related to individual product lines. Total $ 1,000,000 500.000 $ 500.000 Wizards $ 800,000 $ 350.000 $ 450.000 $ Wands 200,000 150.000 50.000 $ Sales Variable manufacturing and selling expenses Contribution Margin Fixed Expenses: Direct (traceable) advertising Product line managers' salaries General expenses Total fixed expenses Net operating income (loss) 18,000 100,000 90.000 208.000 292.000 $ 12.000 $ 60,000 67.500 $ 139.500 $ $ 310,500 $ 6,000 40,000 22500 68.500 ($18.500) $ $ The financial advantage (disadvantage) of discontinuing Wands is: $ 18,500 $ 22,500 ($ 4,000) $ 27.500