7. Party Supply is trying to decide whether or not to continue its costume segment. The information shown is available forParty Supply's business segments. Assume that neither the Direct fixed costs nor the Allocated common fixed costs may beeliminated, but will be allocated to the two remaining segments.CostumersParty SuppliesFloral DecorationsSales$160,000$110,000$210,000Variable costs84,00050,000120,000Contribution margin76,00060,00090,000Direct fixed costs50,00020,00025,000Allocated common fixed costs.30,00025,00030,000Net income$ (4,000)$15,000$35,000If costumes are dropped, what change will occur to profit?PLEASE NOTE: All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e.$12,345).1. What is Party Supply's Net Income for all three segments?2. What is Party Supply's Net Income or Net Loss, if they drop the Costumes segment?3. If Party Supply eliminates the Costumes segment, what will the effect on profit be?• Incremental dollar amount = .• Increase or Decrease? . Please note: Your answer is either "Increase" or "Decrease" - capital first letters andno quotes.

Party supply Net Income for all 3 segments =Sum of Net income of all 3 segments= $ {- 4000 + 15000 +…

1. What is Party Supply's Net Income for all three segments? 2. What is Party Supply's Net Income or Net Loss, if they drop the Costumes segment? 3. If Party Supply eliminates the Costumes segment, what will the effect on profit be? • Incremental dollar amount = . • Increase or Decrease? . Please note: Your answer is either "Increase" or "Decrease" - capital first letters and no quotes.

1. What is Party Supply's Net Income for all three segments? 2. What is Party Supply's Net Income or Net Loss, if they drop the Costumes segment? 3. If Party Supply eliminates the Costumes segment, what will the effect on profit be? • Incremental dollar amount = . • Increase or Decrease? . Please note: Your answer is either "Increase" or "Decrease" - capital first letters and no quotes.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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