The Oasis Company sells sporting equipment in three segments: baseball, soccer and tennis. Oasis is considering eliminating its tennis segment. Oasis will base its decision on the financial results of the tennis segment for its most recent year end, which are: Sales $2,000,000 Cost of goods sold (750,000) Sales commissions (200,000) Contribution margin $1,050,000 Corporate office overhead allocation $1,200,000 Net income/(loss) ($150,000) If the Tennis segment is eliminated, Oasis expects that its corporate overhead costs will continue unchanged. Using the information above and relying on a quantitative analysis only.

Answer rating: 100% (QA)

To determine whether Oasis should eliminate its tennis segment we need to compare the net income c... View the full answer