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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.

FINANCIAL ACCOUNTING
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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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.  

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