Decision to eliminate a department: A company may decide to eliminate a loss making department using it income statement showing the net loss for the department, but before elimination the department the company should analyze the Cost saving and revenue loss due to the elimination of the department. Contribution Margin Income Statement: Contribution Margin Income Statement is a format of income statement used for cost volume profit analysis. This statement shows the Variable costs and fixed costs as separate items. It calculates the contribution margin and Net income as well. To Discuss: The points to be considered by Apple while deciding to eliminate its store or department

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Chapter 25, Problem 9DQ

To determine

Concept Introduction:

Decision to eliminate a department:

A company may decide to eliminate a loss making department using it income statement showing the net loss for the department, but before elimination the department the company should analyze the Cost saving and revenue loss due to the elimination of the department.

Contribution Margin Income Statement:

Contribution Margin Income Statement is a format of income statement used for cost volume profit analysis. This statement shows the Variable costs and fixed costs as separate items. It calculates the contribution margin and Net income as well.

To Discuss:

The points to be considered by Apple while deciding to eliminate its store or department

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