39. Fixed costs of goods sold are allocated to each segment based on the number of employees. Fixed selling and administrative expenses are allocated equally. If Segment B is eliminated, P1,500 of fixed costs of good sold would be eliminated. Assuming Segment B is closed, the effect on operating income would be Following are the operating results of the two segments of Parklin Corporation. Segment A Segment B Total Sales P10,000 P15,000 P25,000 Variable costs of goods sold 4,000 8,500 12,500 Fixed costs of goods sold 1,500 2,500 4,000 Gross margin 4,500 4,000 8,500 Variable selling and administrative 2,000 3,000 5,000 Fixed selling and administrative 1,500 1,500 3,000 Operating income (loss) P 1,000 P (500) P 500 4

39. Fixed costs of goods sold are allocated to each segment based on the number of employees. Fixed selling and administrative expenses are allocated equally. If Segment B is eliminated, P1,500 of fixed costs of good sold would be eliminated. Assuming Segment B is closed, the effect on operating income would be Following are the operating results of the two segments of Parklin Corporation. Segment A Segment B Total Sales P10,000 P15,000 P25,000 Variable costs of goods sold 4,000 8,500 12,500 Fixed costs of goods sold 1,500 2,500 4,000 Gross margin 4,500 4,000 8,500 Variable selling and administrative 2,000 3,000 5,000 Fixed selling and administrative 1,500 1,500 3,000 Operating income (loss) P 1,000 P (500) P 500 4

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Description: 39. Fixed costs of goods sold are allocated to each segment based on thenumber of employees. Fixed selling and administrative expenses areallocated equally. If Segment B is eliminated, P1,500 of fixed costs of goodssold would be eliminated. Assuming

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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