Mia D., controller for Mia Machines, has prepared the following financial information for the most recent...

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☐ Mia D., controller for Mia Machines, has prepared the following financial information for the most recent period showing profitability of its three divisions: Sales Appliance Electronics Furniture $102,000 $108,000 $120,000 Variable expenses 86,000 92,000 114,000 |Contribution margin|| 16,000 16,000 6,000 Fixed expenses: Factory insurance 1,000 1,400 2,200 Depreciation 2,000 2,600 3,600 Advertising 600 600 600 Utilities 800 1,000 1,200 Operating income $11,600 $10,400 ($1,600) The factory insurance and advertising assigned to the furniture division are avoidable if the division is discontinued. Depreciation will remain unchanged if a division is dropped. Discontinuing furniture will reduce the utilities by $800. Should Mia discontinue the Furniture line? (Circle One) KEEP Show your calculations below and explain your answer. ELIMINATE ☐ Mia D., controller for Mia Machines, has prepared the following financial information for the most recent period showing profitability of its three divisions: Sales Appliance Electronics Furniture $102,000 $108,000 $120,000 Variable expenses 86,000 92,000 114,000 |Contribution margin|| 16,000 16,000 6,000 Fixed expenses: Factory insurance 1,000 1,400 2,200 Depreciation 2,000 2,600 3,600 Advertising 600 600 600 Utilities 800 1,000 1,200 Operating income $11,600 $10,400 ($1,600) The factory insurance and advertising assigned to the furniture division are avoidable if the division is discontinued. Depreciation will remain unchanged if a division is dropped. Discontinuing furniture will reduce the utilities by $800. Should Mia discontinue the Furniture line? (Circle One) KEEP Show your calculations below and explain your answer. ELIMINATE

Answer rating: 100% (QA)

To determine whether Mia Machines should discontinue the Furniture line we need to analyze the relev... View the full answer