Party Supply is trying to decide whether or not to continue its costume segment. The information shown is available for Party Supply’s business segments. Assume that neither the Direct fixed costs nor the Allocated common fixed costs may be eliminated, but will be allocated to the two remaining segments. Costumes Party Supplies Floral Decorations Sales $160,000 $111,000 $211,000 Variable costs 84,000 49,000 119,000 Contribution margin $76,000 $62,000 $92,000 Direct fixed costs 50,000 19,000 26,000 Allocated common fixed costs 30,000 26,000 30,000 Net income $(4,000) $17,000 $37,000 If costumes are dropped, what change will occur to profit? Profit will decrease by $????
Party Supply is trying to decide whether or not to continue its costume segment. The information shown is available for Party Supply’s business segments. Assume that neither the Direct fixed costs nor the Allocated common fixed costs may be eliminated, but will be allocated to the two remaining segments. Costumes Party Supplies Floral Decorations Sales $160,000 $111,000 $211,000 Variable costs 84,000 49,000 119,000 Contribution margin $76,000 $62,000 $92,000 Direct fixed costs 50,000 19,000 26,000 Allocated common fixed costs 30,000 26,000 30,000 Net income $(4,000) $17,000 $37,000 If costumes are dropped, what change will occur to profit? Profit will decrease by $????
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Party Supply is trying to decide whether or not to continue its costume segment. The information shown is available for Party Supply’s business segments. Assume that neither the Direct fixed costs nor the Allocated common fixed costs may be eliminated, but will be allocated to the two remaining segments.
| Costumes | Party Supplies |
Floral Decorations |
|||
| Sales | $160,000 | $111,000 | $211,000 | ||
| Variable costs | 84,000 | 49,000 | 119,000 | ||
| Contribution margin | $76,000 | $62,000 | $92,000 | ||
| Direct fixed costs | 50,000 | 19,000 | 26,000 | ||
| Allocated common fixed costs | 30,000 | 26,000 | 30,000 | ||
| Net income | $(4,000) | $17,000 | $37,000 |
If costumes are dropped, what change will occur to profit?
Profit will decrease by $????
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