Exercise 23-8 Segment elimination P4 Marin Company makes several products, including canoes. The company reports a loss from its canoe segment (see below). All its variable costs are avoidable, and $300,000 of its fixed costs are avoidable. (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be eliminated? Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $980,000 700,000 280,000 340,000 $ (60,000) Page 923
Exercise 23-8 Segment elimination P4 Marin Company makes several products, including canoes. The company reports a loss from its canoe segment (see below). All its variable costs are avoidable, and $300,000 of its fixed costs are avoidable. (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be eliminated? Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $980,000 700,000 280,000 340,000 $ (60,000) Page 923
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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