Gion Company is considering eliminating its Windows division, which reported a loss for the prior year of $103,000 as shown below. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,128,000 993,000 135,000 238,000 $ (103,000) If the Windows division is dropped, all of its variable costs are avoidable, and $154,700 of its fixed costs are avoideble. The impact on Gion's operating income from eliminating this business segment would be:

Gion Company is considering eliminating its Windows division, which reported a loss for the prior year of $103,000 as shown below. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,128,000 993,000 135,000 238,000 $ (103,000) If the Windows division is dropped, all of its variable costs are avoidable, and $154,700 of its fixed costs are avoideble. The impact on Gion's operating income from eliminating this business segment would be:

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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Gion Company is considering ellminating its Windows division, which reported a loss for the prior year of $92000 as shown below. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,122,000 987,000 135,000 232,000 $ (97,000) If the Windows division is dropped, all of its variable costs are avoidable, and $150,800 of its fixed costs are avoidable. The impact on Glon's operating income from eliminating this business segment would be
Carns Company is considering eliminating its Small Tools Division, which reported a loss for the prior year of $95,000 as shown below. Segment Income (Loss) Sales Variable costs 1,320,000 1,185,000 Contribution margin 135,000 230,000 Fixed costs Income (loss) $ (95,000) If the Small Tools Division is dropped, all of its variable costs are avoidable, and $92,000 of its fixed costs are avoidable. The impact on Carns' Division would be: Multiple Choice $88,300 decrease $92,000 decrease $43,000 decrease arease
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Granfield Company is considering eliminating its backpack division, which reported a loss for the recent year of $46,500 as shown below. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) If the backpack division is dropped, all $484,000 of its variable costs are avoidable, and $216,200 of its fixed costs are avoidable. The impact on Granfield's income from eliminating this business segment would be: Multiple Choice $494,000 decrease $216,200 increase $277,800 decrease $ 978,000 484,000 494,000 540,500 $ (46,500) $494,000 increase
Valdez Company is considering eliminating its kitchen division, which reported an operating loss of $59,000 for the past year as shown below. Segment Income (Loss) Sales. Variable costs. Contribution margin Fixed costs Income (loss) If the kitchen division is dropped, all $850,000 of its variable costs are avoidable, and $209,400 of its fixed costs are avoidable. The impact on Valdez's income from eliminating this business segment would be: Multiple Choice $80,600 decrease $290,000 increase $300,600 decrease $1,140,000 850,000 290,000 349,000 $ (59,000) $80,600 increase
Soar Incorporated is considering eliminating its mountain bike division, which reported a loss for the recent year of $4,000 as shown below. Segment Income (Loss) Sales $ 1,075,000 Variable costs 870,000 Contribution margin 205,000 Fixed costs 209,000 Income (loss) $ (4,000) If the mountain bike division is dropped, all $870,000 of its variable costs are avoidable, and $62,700 of its fixed costs are avoidable. The impact on income for eliminating this business segment would be:
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A) B) The impact on Gilly Company's operating income from eliminating this business segment would be: C) D) 20) Gilly Company is considering eliminating its School Supplies Division, which reported a loss for the prior year of $96,000, as shown below: If the School Supplies Division is dropped, all of its variable costs are avoidable, and $150,150 of its fixed costs are avoidable. E) Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,121,000 986,000 135,000 231,000 $ (96,000) $14,350 decrease. $15,150 increase. $150,150 decrease. $150,150 increase. $15,150 decrease. A) B) C) D) 20) Gilly Company is considering eliminating its School Supplies Division, which reported a loss for the prior year of $96,000, as shown below: E) Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) The impact on Gilly Company's operating income from eliminating this business segment would be: If the School Supplies Division is…
Your Company is considering discontinuing a product. Data from the company's accounting system appear below: Sales $240,000 Variable costs $101,000 Fixed manufacturing costs $ 94,000 Fixed selling & administrative costs $ 55,000 $41,000 of the fixed manufacturing expenses and $25,000 of the fixed selling and administrative expenses cannot be avoided if the product is discontinued. What would be the effect on the company's overall net operating income if the product were dropped?
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