Valdez Company is considering eliminating its kitchen division, which reported an operating loss of $54,000 for...

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Valdez Company is considering eliminating its kitchen division, which reported an operating loss of $54,000 for the past year as shown below. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,070,000 797,000 273,000 327,000 $ (54,000) If the kitchen division is dropped, all $797,000 of its variable costs are avoidable, and $196,200 of its fixed costs are avoidable. The impact on Valdez's income from eliminating this business segment would be: Valdez Company is considering eliminating its kitchen division, which reported an operating loss of $54,000 for the past year as shown below. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,070,000 797,000 273,000 327,000 $ (54,000) If the kitchen division is dropped, all $797,000 of its variable costs are avoidable, and $196,200 of its fixed costs are avoidable. The impact on Valdez's income from eliminating this business segment would be:

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1 Given Information Sales of the kitchen division 1070000 Variable costs of the ki... View the full answer