Bryson Company's western territory's forecasted income statement for the upcoming year is as follows: Sales revenue $700,000 Variable costs 600,000 Contribution margin $100,000 Fixed costs 496,000 Operating income (loss) $(396,000) Bryson Company's management is considering dropping the western territory. If the company eliminates $396,000 of fixed costs by dropping the segment, the segment should be dropped.
Bryson Company's western territory's forecasted income statement for the upcoming year is as follows: Sales revenue $700,000 Variable costs 600,000 Contribution margin $100,000 Fixed costs 496,000 Operating income (loss) $(396,000) Bryson Company's management is considering dropping the western territory. If the company eliminates $396,000 of fixed costs by dropping the segment, the segment should be dropped.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Bryson Company's western territory's
|
Sales revenue |
$700,000 |
|
Variable costs |
600,000 |
|
Contribution margin |
$100,000 |
|
Fixed costs |
496,000 |
|
Operating income (loss) |
$(396,000) |
Bryson Company's management is considering dropping the western territory. If the company eliminates
$396,000
of fixed costs by dropping the segment, the segment should be dropped.
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