Clay Incorporated has two divisions, Myrtle and Laurel. The following is the segmented income statement for the previous year: $ Myrtle $ 576,000 103,200 472,800 79,200 $ 393,600 286,375 $ 107,225 Contribution Margin Laurel $ 338,400 103, 200 $ 235,200 77,200 158,000 172,625 $(14,625) Direct fixed costs Segment margin $ Common fixed costs (allocated). Net operating income (loss) What would Clay's income (loss) be if the Laurel Division was dropped and all common fixed costs are unavoidable? Sales revenue Variable Costs Multiple Choice $393,600 profit $65,400 loss Total $ 914,400 206,400 $ 708,000 156,400 $ 551,600 459,000 $ 92,600 Help
Clay Incorporated has two divisions, Myrtle and Laurel. The following is the segmented income statement for the previous year: $ Myrtle $ 576,000 103,200 472,800 79,200 $ 393,600 286,375 $ 107,225 Contribution Margin Laurel $ 338,400 103, 200 $ 235,200 77,200 158,000 172,625 $(14,625) Direct fixed costs Segment margin $ Common fixed costs (allocated). Net operating income (loss) What would Clay's income (loss) be if the Laurel Division was dropped and all common fixed costs are unavoidable? Sales revenue Variable Costs Multiple Choice $393,600 profit $65,400 loss Total $ 914,400 206,400 $ 708,000 156,400 $ 551,600 459,000 $ 92,600 Help
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Rakesh
Transcribed Image Text:Clay Incorporated has two divisions, Myrtle and Laurel. The following is the segmented income statement for the previous year:
Myrtle
$ 576,000
103,200
$ 472,800
Laurel
$ 338,400
103,200
$ 235,200
77,200
$ 158,000
172,625
$ (14,625)
Total
$ 914,400
Contribution Margin
206,400
$ 708,000
Direct fixed costs
Segment margin
156,400
$ 551,600
459,000
Common fixed costs (allocated)
Net operating income (loss)
$ 92,600
What would Clay's income (loss) be if the Laurel Division was dropped and all common fixed costs are unavoidable?
Sales revenue
Variable Costs
Multiple Choice
$393,600 profit
$65,400 loss
79,200
$ 393,600
286,375
$ 107,225
Help
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