Question
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 $337,500 of its fixed costs are avoidable.
| Segment Income (Loss) | |
|---|---|
| Sales | $ 1,127,000 |
| Variable costs | 805,000 |
| Contribution margin | 322,000 |
| Fixed costs | 385,000 |
| Income (loss) | $ (63,000) |
(a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be continued or eliminated?
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Organizational Change
Authors: Barbara Senior, Stephen Swailes
5th Edition
1292063831, 9781292063836
