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:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text: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:
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