The operations of Knickers Corporation are divided into the Pacers Division and the Bulls Division.Projections for the next year are as follows:$68,250.$45,750.PacersDivision$420,000147,000$273,000126,000$147,000Sales revenueVariable expensesContribution marginDirect fixed expensesSegment margin$ 31,500Allocated common costs47,250Total relevant benefit (loss)$(15.750)Operating income for Knickers Corporation as a whole if the Bulls Division were dropped would beO $84,000.O$99,750.$36,750.BullsDivision$252,000115,500$136,500105,00063,000$ 84,000Total$672,000262,500$409,500231,000$178,500110,250$ 68.250

The dropping of segment would reduce the variable costs and sales revenue. Direct fixed costs can…

The operations of Knickers Corporation are divided into the Pacers Division and the Bulls Division. Projections for the next year are as follows: Sales revenue Variable expenses Contribution margin Direct fixed expenses Segment margin Allocated common costs Total relevant benefit (loss) Operating Total $672,000 262,500 $409,500 231,000 $ 31,500 $178,500 47,250 110,250 $(15,750) $ 68,250 income for Knickers Corporation as a whole if the Bulls Division were dropped would be $84,000. O$99,750. $68,250. Pacers Division $420,000 147,000 $273,000 $45,750. $36,750. 126,000 $147,000 Bulls Division $252,000 115,500 $136,500 105,000 63,000 $ 84,000

The operations of Knickers Corporation are divided into the Pacers Division and the Bulls Division. Projections for the next year are as follows: Sales revenue Variable expenses Contribution margin Direct fixed expenses Segment margin Allocated common costs Total relevant benefit (loss) Operating Total $672,000 262,500 $409,500 231,000 $ 31,500 $178,500 47,250 110,250 $(15,750) $ 68,250 income for Knickers Corporation as a whole if the Bulls Division were dropped would be $84,000. O$99,750. $68,250. Pacers Division $420,000 147,000 $273,000 $45,750. $36,750. 126,000 $147,000 Bulls Division $252,000 115,500 $136,500 105,000 63,000 $ 84,000

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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