please answer this question Ma-De Corporations's Store No. 10 reported the following results ofoperations for the period just ended:SalesP2,500,000Less: Variable expenses1,000,000Contribution marginP1,500,000Less: Fixed expensesSalaries and wagesP750,000Insurance on inventories50,000Depreciation of325,000equipment500,0001,625,000AdvertisingNet income (loss)P(125,000) 325,000equipment500,0001,625,000AdvertisingNet income (loss)P(125,000)The management is contemplating the dropping of Store No. 10 due to theunfavorable operational results. if this would happen, one employee wouldhave to be retained with an annual salary of P150,000. The equipment has noresale value. Store No. 10 should:O not be dropped due to foregone overall income of P350,000O not be dropped due to foregone overall income of P25,000O be dropped due to overall operational loss of P325,000O be dropped due to overall operational loss of P25,000

Soluion: Decision of Dropping any division is based on contribution marging forgone from…

Ma-De Corporations's Store No. 10 reported the following results of operations for the period just ended: Sales P2,500,000 Less: Variable expenses 1,000,000 Contribution margin P1,500,000 Less: Fixed expenses Salaries and wages P750,000 Insurance on inventories 50,000 Depreciation of 325,000 equipment 500,000 1,625,000 Advertising

Ma-De Corporations's Store No. 10 reported the following results of operations for the period just ended: Sales P2,500,000 Less: Variable expenses 1,000,000 Contribution margin P1,500,000 Less: Fixed expenses Salaries and wages P750,000 Insurance on inventories 50,000 Depreciation of 325,000 equipment 500,000 1,625,000 Advertising

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 29E

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