Valber Company is considering eliminating its Phone division. The company allocates fixed costs based on sales,...

  

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Valber Company is considering eliminating its Phone division. The company allocates fixed costs based on sales, if the Phone division is dropped, all of its variable costs are avoidable, and $155,000 of its fixed costs are avoidable. The impact on Valber's income from eliminating the Phone division is: Sales Variable costs Contribution margin Fixed costs Net income (loss) Desktops $ 371,000 206,000 165,000 76,200 88,800 Laptops $ 886,500 640,000 246,500 179,300 67,200 Tablets $ 709,000 533,000 176,000 143,800 32,200 Phones $ 980,000 800,000 180,000 200,000 (20,000) Multiple Choice $10,000 decrease $155.000 increase $155.000 decrease $20,000 increase $25.000 decrease Valber Company is considering eliminating its Phone division. The company allocates fixed costs based on sales, if the Phone division is dropped, all of its variable costs are avoidable, and $155,000 of its fixed costs are avoidable. The impact on Valber's income from eliminating the Phone division is: Sales Variable costs Contribution margin Fixed costs Net income (loss) Desktops $ 371,000 206,000 165,000 76,200 88,800 Laptops $ 886,500 640,000 246,500 179,300 67,200 Tablets $ 709,000 533,000 176,000 143,800 32,200 Phones $ 980,000 800,000 180,000 200,000 (20,000) Multiple Choice $10,000 decrease $155.000 increase $155.000 decrease $20,000 increase $25.000 decrease

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