Branch No. 1 shoulda. not be dropped due to foregone over-all income of P 350,000. b. be dropped due to over-all operating loss of P 325,000c. not be dropped due to foregone overall income of P 25,000.d. be dropped due to over-all operating loss of P 25,000. The management of BB Company is contemplating to discontinue the operations of branch 1 due toits unfavorable operating results last year as shown below.Contribution marginP 1,500,000Less: Fixed costs:P 750,000500,000Depreciation of equipment 325,00050,000SalariesAdvertisingRent1,625,000(P 125,000)Net profitIf this branch would be closed, one employee would have to be retained with an annual salaryof P 150,000.Branch No. 1 should

In this case all the fixed costs are avoidable by closing down the branch except a salary cost of…

Branch No. 1 should a. not be dropped due to foregone over-all income of P 350,000. b. be dropped due to over-all operating loss of P 325,000 c. not be dropped due to foregone overall income of P 25,000. d. be dropped due to over-all operating loss of P 25,000.

Branch No. 1 should a. not be dropped due to foregone over-all income of P 350,000. b. be dropped due to over-all operating loss of P 325,000 c. not be dropped due to foregone overall income of P 25,000. d. be dropped due to over-all operating loss of P 25,000.

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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