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The following information has been take from AAA company that manufacturing Gas ovens for the year 2019: Sales revenues 36,000 - opening inventory of materials
The following information has been take from AAA company that manufacturing Gas ovens for the year 2019: Sales revenues 36,000 - opening inventory of materials 10,000 - closing inventory of materials 8,000 - opening inventory of finished goods 6,000 - closing inventory of finished goods 4,000 - cost of goods produced 26,000 1- Should the Company drop division B? Explain. Support you answer with the necessary calculations. 2- Will your decision be changed if you know that all traceable fixed costs to division B could be avoided and 40% of total common corporate costs assigned to division B would be unaffected by this decision (10 Marks) B- AAA Manufacturing Company has the following information about its product: Selling price per unit $50 Fixed costs $200,000 CM Ratio 30% The following information has been take from AAA company that manufacturing Gas ovens for the year 2019: Sales revenues 36,000 - opening inventory of materials 10,000 - closing inventory of materials 8,000 - opening inventory of finished goods 6,000 - closing inventory of finished goods 4,000 - cost of goods produced 26,000 1- Should the Company drop division B? Explain. Support you answer with the necessary calculations. 2- Will your decision be changed if you know that all traceable fixed costs to division B could be avoided and 40% of total common corporate costs assigned to division B would be unaffected by this decision (10 Marks) B- AAA Manufacturing Company has the following information about its product: Selling price per unit $50 Fixed costs $200,000 CM Ratio 30%
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