Answered: Avoldable Expenses Unavoldable Expenses…

Avoldable Expenses Unavoldable Expenses Cost of goods sold.... Direct expenses ... $56,000 9,250 $1,250 Indirect expenses 470 1,600 Service department costs. 6,000 1,430

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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Question

A guitar manufacturer is considering eliminating its Electric Guitar division because its $76,000 expenses are higher than its $72,000 sales. The company reports the following expenses for this division. Should the division be eliminated?

Avoldable Expenses
Unavoldable Expenses
Cost of goods sold....
Direct expenses ...
$56,000
9,250
$1,250
Indirect expenses
470
1,600
Service department costs.
6,000
1,430

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