A manufacturer is considering eliminating a segment because it shows the following $6,100 loss. All $20,300 of its variable costs are avoidable, and $36,700 of its fixed costs are avoidable. A manufacturer is considering eliminating a segment because it shows the following $6,100 loss. All $20,300 of its variable costs areavoidable, and $36,700 of its fixed costs are avoidable.Segment Income (Loss)Sales$ 60,90020,30040,60046,700Variable costsContribution marginFixed costsIncome (loss)(6,100)(a) Compute the income increase or decrease from eliminating this segment. Compute the income increase or decrease from eliminating this segment.Income IncreaseSegment Elimination AnalysisContinueEliminate(Decrease)Sales$60,900Variable costsContribution marginFixed costsIncome (loss)20,30040,60046,700$(6,100)

Lets understand the basics. When there is choice of whether eliminating any product line then there…

A manufacturer is considering eliminating a segment because it shows the following $6,100 loss. All $20,300 of its variable costs are avoidable, and $36,700 of its fixed costs are avoidable. Segment Income (Loss) Sales $ 60,900 20,300 40,600 46,700 (6,100) Variable costs Contribution margin Fixed costs Income (loss) (a) Compute the income increase or decrease from eliminating this segment.

A manufacturer is considering eliminating a segment because it shows the following $6,100 loss. All $20,300 of its variable costs are avoidable, and $36,700 of its fixed costs are avoidable. Segment Income (Loss) Sales $ 60,900 20,300 40,600 46,700 (6,100) Variable costs Contribution margin Fixed costs Income (loss) (a) Compute the income increase or decrease from eliminating this segment.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

A manufacturer is considering eliminating a segment because it shows the following $6,300 loss. All $21,100 of its variable costs are avoidable, and $38,500 of its fixed costs are avoidable. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be eliminated? Complete this question by entering your answers in the tabs below. Required A $ 63,300 21,100 42,200 48,500 (6,300) Required B Compute the incomo
Manor Company plans to discontinue a department that has a contribution margin of$24,000and 548,000 in foed costs. of the fixed costs,$21,000cannot be avoided. The effect of this discontinuance on Manor's overall net operating income would be an: a increase of$24,000 b increase of$3,000 c. decrease of$3,000 d. decrease of$24,000
Granfield Company is considering eliminating its backpack division, which reported a loss for the recent year of $46,500 as shown below. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) If the backpack division is dropped, all $484,000 of its variable costs are avoidable, and $216,200 of its fixed costs are avoidable. The impact on Granfield's income from eliminating this business segment would be: Multiple Choice $494,000 decrease $216,200 increase $277,800 decrease $ 978,000 484,000 494,000 540,500 $ (46,500) $494,000 increase
Product B has revenue of $39,500, variable cost of goods sold of $25,500, variableselling expenses of $16,500, and fixed costs of $15,000, creating a loss from operationsof $17,500. Prepare and show in solution a differential analysis as of May 9 todetermine if Product B should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision.
Hh2. Account
BE6.5 (LO), AP For Rivera Company, variable costs are 70% of sales, and fixed costs are $210,000. Management's net income goal is $60,000. Compute the required sales needed to achieve management's target net income of $60,000. (Use the mathematical equation approach.) Compute the margin of safety and the margin of safety ratio. HAROH
Marin Company makes several products, including canoes. The company reports a loss from its canoe segment (see below). All its variable costs are avoidable, and $330,000 of its fixed costs are avoidable. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,097, 600 784,000 313,600 376,000 $ (62,400) (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be continued or eliminated?
Wenthorp Enterprises decreased the selling price for its product from $10.00 to $9.00 a unit when total fixed costs decreased from $200,000 to $150,000 and variable cost per unit of $ 5 remained unchanged. How would these changes affect the break-even point? a. The break-even point in units would be increased b. The break-even point in units would be decreased c. The break-even point in units would remain unchanged d. The effect cannot be determined from the information given.