Valber Company is considering eliminating its phone division. The company allocates fixed costs based on sales. If the phone division is dropped, $150,000 of the fixed costs allocated to that division could be eliminated. The impact on Valber's operating income from eliminating the phone division would be: Sales. Variable costs Contribution margin Fixed costs Net income (loss) Desktops $ 356,000 201,000 155,000 71,200 83,800 Laptops Tablets $ 871,500 635,000 236,500 174,300 62,200 Phones $ 694,000 528,000 166,000 138,800 27,200 $ 975,000 795,000 180,000 195,000 (15,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Please do not give solution in image format thanku 

Valber Company is considering eliminating its phone division. The company allocates fixed costs based on sales. If the phone division is
dropped, $150,000 of the fixed costs allocated to that division could be eliminated. The impact on Valber's operating income from
eliminating the phone division would be:
Sales
Variable costs
Contribution margin
Fixed costs
Net income (loss)
Desktops
$
356,000
201,000
155,000
71,200
83,800
Laptops
Tablets
$
871,500
635,000
236,500
174,300
62,200
Phones
$ 694,000
528,000
166,000
138,800
27,200
$ 975,000
795,000
180,000
195,000
(15,000
)
Transcribed Image Text:Valber Company is considering eliminating its phone division. The company allocates fixed costs based on sales. If the phone division is dropped, $150,000 of the fixed costs allocated to that division could be eliminated. The impact on Valber's operating income from eliminating the phone division would be: Sales Variable costs Contribution margin Fixed costs Net income (loss) Desktops $ 356,000 201,000 155,000 71,200 83,800 Laptops Tablets $ 871,500 635,000 236,500 174,300 62,200 Phones $ 694,000 528,000 166,000 138,800 27,200 $ 975,000 795,000 180,000 195,000 (15,000 )
Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Domestic transfer pricing
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
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education