Davenport Incorporated has two divisions, Howard and Jones. The following is the segmented income statement for the past month: HowardJonesTotalSales revenue$ 800,000$ 600,000$ 1,400,000Variable costs400,000480,000880,000Contribution margin$ 400,000$ 120,000$ 520,000Direct fixed costs200,000100,000300,000Segment margin$ 200,000$ 20,000$ 220,000Fixed costs (allocated)150,000150,000300,000Net operating income (loss)$ 50,000$ (130,000)$ (80,000)What would Davenport's income (loss) be if the Jones Division was dropped?

The Company may have different Segments and every segment is responsible for the purpose of earning…

Answered: What would Davenport's income (loss) be…

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

Concept explainers

Question

Davenport Incorporated has two divisions, Howard and Jones. The following is the segmented income statement for the past month:

	Howard	Jones	Total
Sales revenue	$ 800,000	$ 600,000	$ 1,400,000
Variable costs	400,000	480,000	880,000
Contribution margin	$ 400,000	$ 120,000	$ 520,000
Direct fixed costs	200,000	100,000	300,000
Segment margin	$ 200,000	$ 20,000	$ 220,000
Fixed costs (allocated)	150,000	150,000	300,000
Net operating income (loss)	$ 50,000	$ (130,000)	$ (80,000)

What would Davenport's income (loss) be if the Jones Division was dropped?

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

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