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A division of a large company reports the information shown below for a recent year. Variable costs and direct fixed costs are avoidable, and 40% of the indirect fixed costs are avoidable. Based on this information, should the division be eliminated? Sales Variable costs $ 270,000 152,000 Fixed costs Direct Indirect 36,000 56,000 Operating loss $ (26,000) 1-a. Compare the amounts of total revenues and total avoidable expenses. 1-b. Based on this information, should the division be eliminated?

A division of a large company reports the information shown below for a recent year. Variable costs and direct fixed costs are avoidable, and 40% of the indirect fixed costs are avoidable. Based on this information, should the division be eliminated? Sales Variable costs $ 270,000 152,000 Fixed costs Direct Indirect 36,000 56,000 Operating loss $ (26,000) 1-a. Compare the amounts of total revenues and total avoidable expenses. 1-b. Based on this information, should the division be eliminated?

FINANCIAL ACCOUNTING
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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variapie costs 152,000 Fixed costs Direct 36,000 56,000 Indirect Operating loss $ (26,000) 1-a. Compare the amounts of total revenues and total avoidable expenses. 1-b. Based on this information, should the division be eliminated? Complete this question by entering your answers in the tabs below. Required 1A Required 1B Compare the amounts of total revenues and total avoidable expenses. Revenues $ 270,000 Avoidable expenses 2,240,000 74,400 Revenues are greater than (less than) avoidable expenses by $ < Required 1A Required 1B >
Transcribed Image Text:variapie costs 152,000 Fixed costs Direct 36,000 56,000 Indirect Operating loss $ (26,000) 1-a. Compare the amounts of total revenues and total avoidable expenses. 1-b. Based on this information, should the division be eliminated? Complete this question by entering your answers in the tabs below. Required 1A Required 1B Compare the amounts of total revenues and total avoidable expenses. Revenues $ 270,000 Avoidable expenses 2,240,000 74,400 Revenues are greater than (less than) avoidable expenses by $ < Required 1A Required 1B >
A division of a large company reports the information shown below for a recent year. Variable costs and direct fixed costs are avoidable, and 40% of the indirect fixed costs are avoidable. Based on this information, should the division be eliminated? Sales $ 270,000 152,000 Variable costs Fixed costs Direct 36,000 56,000 Indirect Operating loss $ (26,000) 1-a. Compare the amounts of total revenues and total avoidable expenses. 1-b. Based on this information, should the division be eliminated? Complete this question by entering your answers in the tabs below. Required 1A Required 1B Compare the amounts of total revenues and total avoidable expenses. Revenues $ 270,000
Transcribed Image Text:A division of a large company reports the information shown below for a recent year. Variable costs and direct fixed costs are avoidable, and 40% of the indirect fixed costs are avoidable. Based on this information, should the division be eliminated? Sales $ 270,000 152,000 Variable costs Fixed costs Direct 36,000 56,000 Indirect Operating loss $ (26,000) 1-a. Compare the amounts of total revenues and total avoidable expenses. 1-b. Based on this information, should the division be eliminated? Complete this question by entering your answers in the tabs below. Required 1A Required 1B Compare the amounts of total revenues and total avoidable expenses. Revenues $ 270,000
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