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What will Evans profitability be if it eliminates segment X and unit sales of segment Z increase by 8%? Show your calculations here: NI =
What will Evans profitability be if it eliminates segment X and unit sales of segment Z increase by 8%? Show your calculations here:
NI = $
Evan Company operates three segments. Income statements for the segments imply that Evan could improve profitability if Segment X is eliminated. THE EVAN COMPANY Income Statement For the Year 2011 X Y Z Segment Sales Cost of goods sold Sales commissions Contribution margin General fixed oper. exp. (allocation of president's salary) Advertising expense (specific to individual segments) Net income $ 87,000 (67,000) (14,000) 6,000 (20,000) (3,000) S[17,000) $210,000 (82,000) (22,000) 106,000 (20,000) (18,000) $ 68,000 $200,000 (85,000) (20,000) 95,000 (20,000) 0 $ 75,000Step by Step Solution
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