Dudley Transport Company divides its operations into four divisions. A recent income statement for its West Division follows. DUDLEY TRANSPORT COMPANY West Division Income Statement for Year 3 Revenue $ 300,000 Salaries for drivers (210,000 ) Fuel expenses (30,000 ) Insurance (42,000 ) Division-level facility-sustaining costs (24,000 ) Companywide facility-sustaining costs (78,000 ) Net loss $ (84,000 ) Required By how much would companywide income increase or decrease if West Division is eliminated? Should West Division be eliminated? Assume that West Division is able to increase its revenue to $324,000 by raising its prices. Determine the amount of the increase or decrease that would occur in companywide net income if the segment were eliminated. Should West Division be eliminated if revenue were $324,000? What is the minimum amount of revenue required to justify continuing the operation of West Division?
Dudley Transport Company divides its operations into four divisions. A recent income statement for its West Division follows. DUDLEY TRANSPORT COMPANY West Division Income Statement for Year 3 Revenue $ 300,000 Salaries for drivers (210,000 ) Fuel expenses (30,000 ) Insurance (42,000 ) Division-level facility-sustaining costs (24,000 ) Companywide facility-sustaining costs (78,000 ) Net loss $ (84,000 ) Required By how much would companywide income increase or decrease if West Division is eliminated? Should West Division be eliminated? Assume that West Division is able to increase its revenue to $324,000 by raising its prices. Determine the amount of the increase or decrease that would occur in companywide net income if the segment were eliminated. Should West Division be eliminated if revenue were $324,000? What is the minimum amount of revenue required to justify continuing the operation of West Division?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Hello, I only need Req B.
Dudley Transport Company divides its operations into four divisions. A recent income statement for its West Division follows.
| DUDLEY TRANSPORT COMPANY | |||
| West Division | |||
| Income Statement for Year 3 | |||
| Revenue | $ | 300,000 | |
| Salaries for drivers | (210,000 | ) | |
| Fuel expenses | (30,000 | ) | |
| Insurance | (42,000 | ) | |
| Division-level facility-sustaining costs | (24,000 | ) | |
| Companywide facility-sustaining costs | (78,000 | ) | |
| Net loss | $ | (84,000 | ) |
Required
-
By how much would companywide income increase or decrease if West Division is eliminated? Should West Division be eliminated?
-
Assume that West Division is able to increase its revenue to $324,000 by raising its prices. Determine the amount of the increase or decrease that would occur in companywide net income if the segment were eliminated. Should West Division be eliminated if revenue were $324,000?
-
What is the minimum amount of revenue required to justify continuing the operation of West Division?
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Required A Required B
Required C
Assume that West Division is able to increase its revenue to $324,000 by raising its prices. Determine the amount of the
increase or decrease that would occur in companywide net income if the segment were eliminated. Should West Division be
eliminated if revenue were $324,000?
Income would
decrease
Should West Division be eliminated?
by $ 24,000
No
< Required A
Required C >
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