Answered: P210,000 190,000 P 20,000 50,000 P…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Management is considering the discontinuance of the manufacture and sale of Product G2 at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Products F1 and H3. What is the amount of change in net income for the current year that will result from the discontinuance of Product G2?

P30,000 decrease

P20,000 decrease

P20,000 increase

P30,000 increase

The condensed income statement for a business for the past year is presented as follows:
Product
F1
P300,000
180,000
P120,000
50,000
P 70.000
G2
P210,000
Sales
Less variable costs
Contribution margin
Less fixed costs
Income (loss) from operation
190,000
P 20,000
50,000
P (30,000)
H3
P340,000
220,000
P120,000
40,000
P 80.000
Total
P850,000
590,000
P260,000
140,000
P120,000

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Discontinuing operations for a product or a service line

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions