RRJ Company have segment COO and segment BOO. During the past years, 100,000 and 40,000 were produced from segment COO and BOO respectively. Fixed cost for RRJ Company totaled $450,000 of which 180,000 can be avoided if segment BOO is dropped and $90,000 can be avoided if segment COO is dropped. The selling price for segment COO and BOO are $50 and $100, respectively. The variable cost of segment COO and BOO are $30 and $90, respectively. Requirement: 1) Compute the segment margin of segment COO. 2) Compute for the increase(decrease) of RRJ Company if BOO segment dropped.
RRJ Company have segment COO and segment BOO. During the past years, 100,000 and 40,000 were produced from segment COO and BOO respectively. Fixed cost for RRJ Company totaled $450,000 of which 180,000 can be avoided if segment BOO is dropped and $90,000 can be avoided if segment COO is dropped. The selling price for segment COO and BOO are $50 and $100, respectively. The variable cost of segment COO and BOO are $30 and $90, respectively. Requirement: 1) Compute the segment margin of segment COO. 2) Compute for the increase(decrease) of RRJ Company if BOO segment dropped.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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RRJ Company have segment COO and segment BOO. During the past years, 100,000 and 40,000 were produced from segment COO and BOO respectively. Fixed cost for RRJ Company totaled $450,000 of which 180,000 can be avoided if segment BOO is dropped and $90,000 can be avoided if segment COO is dropped. The selling price for segment COO and BOO are $50 and $100, respectively. The variable cost of segment COO and BOO are $30 and $90, respectively.
Requirement:
1) Compute the segment margin of segment COO.
2) Compute for the increase(decrease) of RRJ Company if BOO segment dropped.
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