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

Transcribed Image Text:

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 $153,000 of its fixed costs are avoidable. The impact on Valber's income from eliminating the Phone division is: 139 Sales Variable costs Contribution margin Fixed costs Net income (loss) Desktops $ 365,000 204,000 Laptops $ 880,500 Tablets $ 703,000 Phones $ 978,000 638,000 531,000 798,000 161,000 242,500 172,000 180,000 74,200 177,300 141,800 198,000 86,800 65,200 30,200 (18,000 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 $153,000 of its fixed costs are avoidable. The impact on Valber's income from eliminating the Phone division is: 139 Sales Variable costs Contribution margin Fixed costs Net income (loss) Desktops $ 365,000 204,000 Laptops $ 880,500 Tablets $ 703,000 Phones $ 978,000 638,000 531,000 798,000 161,000 242,500 172,000 180,000 74,200 177,300 141,800 198,000 86,800 65,200 30,200 (18,000