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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Answer and solution please. Thank you!
Gata Co. plans to discontinue a department with a P48,000 contribution to
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
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