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A В Total 100 $ 20 $ Sales Revenue 160 $ 260 Less V.C. 140 160 C.M. 80 20 100 Less Direct F.C. Depreciation 20 10 30 Salaries 30 50 80 Segment Margin $30 ($40) ($10) A. Should product B be dropped if $10 of the salaries can be eliminated? Show what the impact would be on net income. Should Product B be dropped? B. What if salaries would be completely eliminated due to layoff? Show what the impact would be on net income. Should Product B be dropped?

A В Total 100 $ 20 $ Sales Revenue 160 $ 260 Less V.C. 140 160 C.M. 80 20 100 Less Direct F.C. Depreciation 20 10 30 Salaries 30 50 80 Segment Margin $30 ($40) ($10) A. Should product B be dropped if $10 of the salaries can be eliminated? Show what the impact would be on net income. Should Product B be dropped? B. What if salaries would be completely eliminated due to layoff? Show what the impact would be on net income. Should Product B be dropped?

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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We make 2 products:

 

A В Total 100 $ 20 $ Sales Revenue 160 $ 260 Less V.C. 140 160 C.M. 80 20 100 Less Direct F.C. Depreciation 20 10 30 Salaries 30 50 80 Segment Margin $30 ($40) ($10) A. Should product B be dropped if $10 of the salaries can be eliminated? Show what the impact would be on net income. Should Product B be dropped? B. What if salaries would be completely eliminated due to layoff? Show what the impact would be on net income. Should Product B be dropped?
Transcribed Image Text:A В Total 100 $ 20 $ Sales Revenue 160 $ 260 Less V.C. 140 160 C.M. 80 20 100 Less Direct F.C. Depreciation 20 10 30 Salaries 30 50 80 Segment Margin $30 ($40) ($10) A. Should product B be dropped if $10 of the salaries can be eliminated? Show what the impact would be on net income. Should Product B be dropped? B. What if salaries would be completely eliminated due to layoff? Show what the impact would be on net income. Should Product B be dropped?
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