TB MC Qu. 10-109 (Algo) Carns Company is considering...

Cars Company is considering eliminating its Small Tools Division, which reported a loss for the prior year of $275,000 as shown

below. Segment Income (Loss)

Sales

Variable costs

Contribution margin

Fixed costs

Income (loss)

$ 1,500,000

1.365,000

135,000

410 000

$ (275, 000)

If the Small Tools Division is dropped, all of its variable costs are avoidable, and $123,000 of its fixed costs are avoidable. The

impact on Carns's income from eliminating the Small Tools Division would be

TB MC Qu. 10-109 (Algo) Carns Company is considering... Cams Company is considering elminating its Small Tools Division, which reported a loss for the prior year of $275,000 as shosvin below. If the Small Tools Division is dropped all of its variabie costs are avoidable. and $123.000 of its fixed costs are avoidable. The impact on Cams's income from eliminating the Smali Tools Division would be $28,100 decrease $12,000 decrease $410,000 decrease $12,000 increase $123,000 decrease