I need full details solution. Contribution marginFixed costsIncome (loss)190,000193,000$ (3,000)the mountain bike division is dropped, all $860,000 of its variable costs are avoidable, and $57,900 of its fixed costs are avoidable. The impact ccome for eliminating this business segment would be:Multiple Choice$190,000 increase$132,100 decrease$54,900 decrease$190,000 decrease$57,900 decrease Soar Incorporated is considering eliminating its mountain bike division, which reported a loss for the recent year of $3,000 as shown below.SalesSegment Income (Loss)$ 1,050,000860,000Variable costs.Contribution marginFixed costsIncome (loss)190,000193,000$ (3,000)If the mountain bike division is dropped, all $860,000 of its variable costs are avoidable, and $57,900 of its fixed costs are avoidable. The impact onincome for eliminating this business segment would be:

The correct answer from the multiple-choice options is:$730,900 decreaseExplanation:To determine the…

Answered: Contribution margin Fixed costs Income…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Carns Company is considering eliminating its Small Tools Division, which reported a loss for the prior year of $95,000 as shown below. Segment Income (Loss) Sales Variable costs 1,320,000 1,185,000 Contribution margin 135,000 230,000 Fixed costs Income (loss) $ (95,000) If the Small Tools Division is dropped, all of its variable costs are avoidable, and $92,000 of its fixed costs are avoidable. The impact on Carns' Division would be: Multiple Choice $88,300 decrease $92,000 decrease $43,000 decrease arease
Gion Company is considering ellminating its Windows division, which reported a loss for the prior year of $92000 as shown below. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,122,000 987,000 135,000 232,000 $ (97,000) If the Windows division is dropped, all of its variable costs are avoidable, and $150,800 of its fixed costs are avoidable. The impact on Glon's operating income from eliminating this business segment would be
Sanra company is considering eliminating its mountain bike division, which reported an operating loss for the recent year of 3,000. The division sales for the year were 1,050,000 and the variable costs were 860,000. The fixed costs of the division were 193,000. If the mountain bike division is dropped, 30% of the fixed costs allocated to that division could be eliminated. The impact on operating income for eliminating this business segment would be: a.57,900 decrease b.132,100 decrease c.54,900 decrease d.190,000 increase e.190,000 decrease
Lafayette Corp. is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $6,000. The division sales for the year were $1,044,000 and the variable costs were $863,000. The fixed costs of the division were $187,000. If the mountain bike division is dropped, 30% of the fixed costs allocated to that division could be eliminated. The impact on operating income for eliminating this business segment would be: Multiple Choice $181,000 decrease $181,000 increase $124,900 decrease $56,100 decrease $50,100 decrease
Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $4,000. The division sales for the year were $1,051,000 and the variable costs were $861,000. The fixed costs of the division were $194,000. If the mountain bike division is dropped, 30% of the fixed costs allocated to that division could be eliminated. The impact on operating income for eliminating this business segment would be: Multiple Choice $54,200 decrease $190,000 decrease $190,000 increase $58,200 decrease $131,800 decrease
Valdez Company is considering eliminating its kitchen division, which reported an operating loss of $59,000 for the past year as shown below. Segment Income (Loss) Sales. Variable costs. Contribution margin Fixed costs Income (loss) If the kitchen division is dropped, all $850,000 of its variable costs are avoidable, and $209,400 of its fixed costs are avoidable. The impact on Valdez's income from eliminating this business segment would be: Multiple Choice $80,600 decrease $290,000 increase $300,600 decrease $1,140,000 850,000 290,000 349,000 $ (59,000) $80,600 increase
Granfield company is considering eliminating its backpack division, which reported an operating loss for the recent year of $42700. The division sales for the year were $973300 and the variable costs were $482000. The fixed costs of the division were $534000. If the backpack division dropped, 40% of the fixed costs allocated to that division could be eliminated. The impact on granfield operating income for eliminating this business segment would be?
Gion Company is considering eliminating its windows division, which reported an operating loss for the recent year of $125,000. Division sales for the year were $1,310,000 and its variable costs were $1,175,000. The fixed costs of the division were $270,000. If the windows division is dropped, 60% of the fixed costs allocated to it could be eliminated. The impact on Gion's operating income from eliminating this business segment would be: Multiple Choice $56,700 decrease $27.000 increase $162,000 decrease $162,000 increase $27,000 decrease
The Draper Corporation is considering dropping its Doombug toy due to continuing losses. Data on the toy for the past year follow: Sales of 15,000 units $ 150,000 Variable expenses 120,000 Contribution margin 30,000 Fixed expenses 40,000 Net operating loss $ (10,000 ) If the toy were discontinued, Draper could avoid $8,000 per year in fixed costs. The remainder of the fixed costs are not avoidable. Suppose that if the Doombug toy is dropped, the production and sale of other Draper toys would increase so as to generate a $16,000 increase in the contribution margin received from these other toys. If all other conditions are the same, the financial advantage (disadvantage) from discontinuing the production and sale of Doombugs would be: $28,000 ($6,000) ($2,000) $14,000
Ram Co. is trying to decide whether or not to discontinue one of its products, slow cookers. Last year's sales and expenses for slow cookers are as follows: Sales $65,000 Less expenses: Variable costs $35,000 Fixed costs 48,000 83,000 Net operating loss $(18,000) If slow cookers are discontinued, 75% of the fixed costs can be avoided. At the same time, discontinuing slow cookers will have no effect on other products. What is the financial advantage or disadvantage of discontinuing slow cookers? Multiple Choice a)$17,000 financial advantage b)$13,000 financial disadvantage c)$4,000 financial disadvantage d)$6,000 financial advantage
Capri Construction plans to discontinue its roofing segment. last year, this segment generated a contribution margin of $65,000 and incurred $70,000 in fixed costs. discontinuing the segment will allow the company to avoid half of the fixed costs. what effect is expected to occur on the company's overall income (loss)? -$(30,000) please explain step by step how they got this answer. Thank you.
ABC Company is considering eliminating its parts division as a result of its current operating performance: Sales = $40,000; Variable expenses = $20,000; Contribution margin = $20,000; Fixed expenses = $23,000; Operating income = $(3,000). ABC determines that $15,000 of the $23,000 fixed expenses are direct fixed expenses to the parts division. If ABC Company eliminates the parts division, ABC's total operating income wil

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