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Marin Company makes several products, including canoes. The company reports a loss from its canoe segment (see below). All its variable costs are avoidable, and
Marin Company makes several products, including canoes. The company reports a loss from its canoe segment (see below). All its variable costs are avoidable, and $307,500 of its fixed costs are avoidable.
Segment Income (Loss) | |
---|---|
Sales | $ 1,009,400 |
Variable costs | 721,000 |
Contribution margin | 288,400 |
Fixed costs | 349,000 |
Income (loss) | $ (60,600) |
(a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be continued or eliminated?
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