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 $342,500 of its fixed costs are avoidable. Segment Income (Loss) Sales$ 1,146,600Variable costs819,000Contribution margin327,600Fixed costs391,000Income (loss)$ (63,400)(a) Compute the income increase or decrease from eliminating this segment.(b) Should the segment be continued or eliminated? Segment Elimination AnalysisIncome (loss)ContinueEliminateIncome Increase(Decrease)

The Company has suffered loss in canoe segment as given. The Variable cost are avoidable and fixed…

Answered: Marin Company makes several products,…

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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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 $342,500 of its fixed costs are avoidable.

Segment Income (Loss)
Sales	$ 1,146,600
Variable costs	819,000
Contribution margin	327,600
Fixed costs	391,000
Income (loss)	$ (63,400)

(a) Compute the income increase or decrease from eliminating this segment.
(b) Should the segment be continued or eliminated?

Segment Elimination Analysis
Income (loss)
Continue
Eliminate
Income Increase
(Decrease)

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