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) Multiple Choice f 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: O $494,000 decrease O $216,200 increase O $277,800 decrease $ 978,000 484,000 O$494,000 increase 494,000 540,500 $ (46,500)
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) Multiple Choice f 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: O $494,000 decrease O $216,200 increase O $277,800 decrease $ 978,000 484,000 O$494,000 increase 494,000 540,500 $ (46,500)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter17: Activity Resource Usage Model And Tactical Decision Making
Section: Chapter Questions
Problem 24P
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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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff523dc8a-9051-46da-af12-e46643d993ab%2Fdde1984b-5010-44ed-8fa0-7a84de075821%2F95ntrn_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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
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