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

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

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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