A segment of a company reports the following loss for the year. All $175,000 of its...

 

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A segment of a company reports the following loss for the year. All $175,000 of its variable costs are avoidable, and $104,000 of its fixed costs are avoidable. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 250,000 175,000 75,000 110,000 (35,000) (a) Compute the income increase or decrease from eliminating this segment (b) Should the segment be eliminated? A segment of a company reports the following loss for the year. All $175,000 of its variable costs are avoidable, and $104,000 of its fixed costs are avoidable. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 250,000 175,000 75,000 110,000 (35,000) (a) Compute the income increase or decrease from eliminating this segment (b) Should the segment be eliminated?

Answer rating: 100% (QA)

To compute the income increase or decrease from eliminating the segment we need to consider the avoi... View the full answer