Marin Company makes several products, including canoes. The company reports a loss from its canoe segment (see below). All itsvariable costs are avoidable, and $300,000 of its fixed costs are avoidable.Segment Income (Loss)SalesVariable costsContribution marginFixed costsIncome (loss)(a) Compute the income increase or decrease from eliminating this segment.(b) Should the segment be continued or eliminated?Required A Required BComplete this question by entering your answers in the tabs below.$ 980,000700,000280,000340,000$ (60,000)Segment Elimination AnalysisCompute the income increase or decrease from eliminating this segment.Income Increase(Decrease)SalesVariable costsContribution marginFixed costsIncome (loss)Continue$0Eliminate0 $< Required A00$Required B0>

In evaluating, whether continue to invest or not in a division, the company should calculate the Relevant profit/loss of the division. Amount used to evaluate whether continue to invest in division = Revenue - Variable operating expenses - Controllable fixed costs.a. Segment Elimination Analysis Continue Eliminate Income Increase (Decrease) Sales $980,000 0 Variable costs 700,000 0 Contribution margin $280,000 0 Fixed costs 300,000 300,000 Income (loss) $(20,000) $(300,000) $(280,000) b. Segment should be continued.

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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 $300,000 of its fixed costs are avoidable. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) (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 $ 980,000 700,000 280,000 340,000 $ (60,000) Compute the income increase or decrease from eliminating this segment. Income Increase (Decrease) Segment Elimination Analysis Sales Variable costs Contribution margin Fixed costs Income (loss) Continue $ 0 Eliminate 0 $ 0 0 $ 0 ||

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 $300,000 of its fixed costs are avoidable. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) (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 $ 980,000 700,000 280,000 340,000 $ (60,000) Compute the income increase or decrease from eliminating this segment. Income Increase (Decrease) Segment Elimination Analysis Sales Variable costs Contribution margin Fixed costs Income (loss) Continue $ 0 Eliminate 0 $ 0 0 $ 0 ||

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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