Valdez Company is considering eliminating its kitchen division, which reported an operating loss of $56,000 for...

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Valdez Company is considering eliminating its kitchen division, which reported an operating loss of $56,000 for the past year as shown below. Segment Income (Loss) Sales: Variable costs Contribution margin Fixed costs Income (loss) $ 1,110,000 827,000 283,000 339,000 $ (56,000) if the kitchen division is dropped, all $827,000 of its variable costs are avoidable, and $203,400 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 $56,000 for the past year as shown below. Segment Income (Loss) Sales: Variable costs Contribution margin Fixed costs Income (loss) $ 1,110,000 827,000 283,000 339,000 $ (56,000) if the kitchen division is dropped, all $827,000 of its variable costs are avoidable, and $203,400 of its fixed costs are avoidable. The impact on Valdez's income from eliminating this business segment would be:

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Step 1 Given that kitchen division has 56000 loss And ... View the full answer