Marin Company makes several products, including canoes. The company reports a loss from its canoe segment (see below). All its variable costs are avoidable, and $325,000 of its fixed costs are avoidable. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,078,000 770,000 308,000 370,000 $ (62,000) (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be continued or eliminated?
Marin Company makes several products, including canoes. The company reports a loss from its canoe segment (see below). All its variable costs are avoidable, and $325,000 of its fixed costs are avoidable. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,078,000 770,000 308,000 370,000 $ (62,000) (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be continued or eliminated?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Marin Company makes several products, including canoes. The company reports a loss from its canoe segment (see below). All its
variable costs are avoidable, and $325,000 of its fixed costs are avoidable.
Segment Income (Loss)
Sales
Variable costs
Contribution margin
Fixed costs
Income (loss)
$ 1,078,000
770,000
308,000
370,000
$ (62,000)
(a) Compute the income increase or decrease from eliminating this segment.
(b) Should the segment be continued or eliminated?
Complete this question by entering your answers in the tabs below.
Required A Required B
Compute the income increase or decrease from eliminating this segment.
Segment Elimination Analysis
Continue
Eliminate
Income Increase
(Decrease)
0
0
Income (loss)
$
0 $
0 $
0
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