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 $158,000 of its fixed costs are avoidable. The impact on Valber's income from eliminating the Phone division is: Sales Variable costs 5 Contribution margin Fixed costs Net income (loss) Desktops $ 380,000 209,000 Laptops $ 895,500 643,000 Tablets $ 718,000 536,000 Phones $ 983,000 803,000 171,000 252,500 182,000 180,000 79,200 182,300 146,800 203,000 91,800 70,200 35,200 (23,000) 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 $158,000 of its fixed costs are avoidable. The impact on Valber's income from eliminating the Phone division is: Sales Variable costs 5 Contribution margin Fixed costs Net income (loss) Desktops $ 380,000 209,000 Laptops $ 895,500 643,000 Tablets $ 718,000 536,000 Phones $ 983,000 803,000 171,000 252,500 182,000 180,000 79,200 182,300 146,800 203,000 91,800 70,200 35,200 (23,000)

Answer rating: 100% (QA)

To determine the impact on Valbers income from eliminating the Phone division we need to consider th... View the full answer