Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Valdez Company is considering eliminating its kitchen division, which reported an operating loss of $57,000 for the past year as shown below. Segment Income (Loss)

Valdez Company is considering eliminating its kitchen division, which reported an operating loss of $57,000 for the past year as shown below. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,120,000 835,000 285,000 342,000 $ (57,000) Chec If the kitchen division is dropped, all $835,000 of its variable costs are avoidable, and $205,200 of its fixed costs are avoidable. The impact on Valdez's income from eliminating this business segment would be:

A. 79800 decrease

B. 285000 increase

C.295800 decrease

D. 79800 increase

E. 285000 decrease

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial And Managerial Accounting

Authors: John J. Wild

9th Edition

1260728773, 9781260728774

More Books

Students also viewed these Accounting questions