Question
URGENT PLEASE !!!! Apple, Inc., has three divisions: N, C, and R. The segmented income statement for last year revealed the following: Apple, Inc. Divisional
URGENT PLEASE !!!!
Apple, Inc., has three divisions: N, C, and R. The segmented income statement for last year revealed the following:
Apple, Inc. Divisional Profit Summary | |||||
| N. Division | C. Division | R. Division | Total Company |
|
Sales | 533,000 | $250,000 | $837,000 | $1,620,000 |
|
Less variable costs | 435,000 | 137,000 | 472,000 | 1,044,000 |
|
Contribution margin | $ 98,000 | $113,000 | $365,000 $ | $ 576,000 |
|
Less direct fixed costs | 106,000 | 100,000 | 139,000 | 345,000 |
|
Segment margin | ($ 8,000) | $ 13,000 | $226,000 | $ 231,000 |
|
Less common fixed costs |
|
|
| 120,000 |
|
Operating income |
|
|
| $ 111,000 |
|
1. How will Apple be affected if the N Division is dropped?
2. Assume the elimination of the N Division causes the sales of the R Division to decrease by 10 percent. How will Apple be affected if the N Division is dropped?
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