Answer and solution please. Thank you! Gata Co. plans to discontinue a department with a P48,000 contribution to overhead, and allocated overhead of P96,000, of which P42,000 cannot be eliminated. What would be the effect of this discontinuance on Gata’s pretax profit? a. P48,000 increase b. P48,000 decrease c. P6,000 increase d. P6,000 decrease

Answer and solution please. Thank you! Gata Co. plans to discontinue a department with a P48,000 contribution to overhead, and allocated overhead of P96,000, of which P42,000 cannot be eliminated. What would be the effect of this discontinuance on Gata’s pretax profit? a. P48,000 increase b. P48,000 decrease c. P6,000 increase d. P6,000 decrease

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 12MC: Youngstown Construction plans to discontinue its rooting segment. Last year, this segment generated...

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pls show solutions Manor Company plans to discontinue a department that has a contribution margin of $25,000 and $50,000 in fixed costs. Of the fixed costs, $21,000 cannot be eliminated. The effect on the profit of Manor Company ofdiscontinuing this department would be an increase or decrease of how much?
Please help me with show all calculation thanku
Your Company plans to discontinue a department that has a contribution margin of $22,000 and $50,000 in fixed costs. Of the fixed costs, 42%6 cannot be eliminated. What is the effect of this discontinuance on net operating income? O decrease by $24,000 increase by $ 7,000 O decrease by $ 7,000 O increase by $ 1,000 O decrease by $ 1,000
Hh2. Account
Your Company plans to discontinue a department that has a contribution margin of $22,000 and $50,000 in fixed costs. Of the fixed costs, 42% cannot be eliminated. What is the effect of this discontinuance on net operating income? A. decrease by $ 7,000 B. increase by $ 1,000 C. decrease by $24,000 D. decrease by $ 1,000 E. increase by $ 7,000
The following information is for X Company's two products - A and B: Sales Total contribution margin Fixed costs: Submit Angus Tres 012 Tring Avoidable Unavoidable Profit Product A $93,000 39,990 21,000 5,000 $13,990 Product B $92,000 36,800 26,500 30,000 $-19,700 The company is considering dropping Product B because of the $19,700 loss. If X Company drops Product B, it will use the freed-up resources to increase sales of Product A by $16,000. If X Company drops Product B and increases sales of A, firm profits will change by
A firm contemplates to drop a segment that shows a contribution margin of P25,000. Overhead allocated to the segment amounts to P40,000 of which P17,500 cannot be eliminated. What is the effect of this discontinuance on the company’s profit before tax? (Indicate if increase or decrease, e.g. “2,000 increase” or “2,000 decrease”)
Georgia Co. plans to discontinue a department that has a $49,000 contribution margin and $96,000 of fixed costs. Of these fixed costs. Of these fixed costs, $42,000 cannot be avoided. What would be the effect of this discontinuance on Georgia's overall net operating income? increase of $48,000 decrease of $48,000 increase of $5,000 decrease of $6,000
N9. Account
Youngstown Construction plans to discontinue its rooting segment. Last year, this segment generated a contribution margin of $65.000 and incurred $70.000 in fixed costs. Discontinuing the segment will allow the company to avoid half of the fixed costs. What effect is expected to occur to the companys overall profit? A. a decrease of $5,000 B. a decrease of $30,000 C. a decrease of $5,000 D. an increase of $30,000
The following information relates to next year’s projected operating results of the ARO Division of ABE Corporation: Contribution Margin P1,500,000 Fixed Expenses 1,700,000 Net operating loss P(200,000) If ARO Division is dropped, P1,000,000 of the above fixed costs would not be eliminated. What will be the effect (increase/decrease) on ABE’s profit next year if ARO Division is dropped instead of being kept?
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