Week 4 Synchronous Session 7 Question 3

A guitar manufacturer is considering eliminating its electric guitar division because its $88,160 expenses are higher than its $82,490 sales. The company reports the following expenses for this division. Avoidable Unavoidable Expenses Expenses Cost of goods sold $ 64,000 Direct expenses 11, 050 $1, 650 Indirect expenses 830 2,600 Service department costs 6,400 1, 630 Should the division be eliminated? Electric Guitar Division is: Kept Eliminated Sales Expenses: Total expenses Net income (loss) Revenues from electric guitar division Avoidable expenses Revenues are greater than (less than) avoidable expenses by