Gold€™s Glass, Inc., has three divisions: Commercial, Nonprofit, and Residential. The segmented income statement for last year revealed the following:

1. How will Gold€™s Glass be affected if the Nonprofit Division is dropped?
2. Assume the elimination of the Nonprofit Division causes the sales of the Residential Division to decrease by 10 percent. How will Gold€™s Glass be affected if the Nonprofit Division isdropped?

Transcribed Image Text:

Gold's Glass, Inc. Divisional Profit Summary and Decision Analysis Commercial Division $300,000 157,000 $143,000 114,000 29,000 Nonprofit Division $523,000 425,000 S 98,000 116,000 S (18,000) Residential Total Sales Less variable costs Contribution margin Less direct fixed costs Segment margin Less common fixed costs Operating income Division Company $837,000 $1,660,000 1,054,000 $365,000 606,000 369,000 $226,000 237,000 168,000 69,000 472,000 139,000