A division of a large company reports the information shown below for a recent year. Variable costs and direct fixed costs areavoidable, and 50% of the indirect fixed costs are avoidable. Based on this information, should the division be eliminated?$ 265,000146,000SalesVariable costsFixed costsDirect39,00053,000IndirectOperating loss$(27,000)1-a. Compare the amounts of total revenues and total avoidable expenses.1-b. Based on this information, should the division be eliminated?Complete this question by entering your answers in the tabs below.Required 1ARequired 1BCompare the amounts of total revenues and total avoidable expenses.RevenuesAvoidable expensesRevenues are greater than (less than) avoidable expenses byRequired 1ARequired 1B > A division of a large company reports the information shown below for a recent year. Variable costs and direct fixed costs areavoidable, and 50% of the indirect fixed costs are avoidable. Based on this information, should the division be eliminated?$ 265,000146,000SalesVariable costsFixed costsDirect39,00053,000$ (27,000)IndirectOperating loss1-a. Compare the amounts of total revenues and total avoidable expenses.1-b. Based on this information, should the division be eliminated?Complete this question by entering your answers in the tabs below.Required 1ARequired 1BBased on this information, should the division be eliminated?...... .....................................Based on this information, should the division be eliminated?

Avoidable indirect fixed cost=Indirect fixed cost×Percent avoidable=$53,000×50%=$26,500

A division of a large company reports the information shown below for a recent year. Variable costs and direct fixed costs are avoidable, and 50% of the indirect fixed costs are avoidable. Based on this information, should the division be eliminated? $265,000 146,000 Sales Variable costs Fixed costs Direct 39,000 53,000 $(27,000) Indirect Operating loss 1-a. Compare the amounts of total revenues and total avoidable expenses. 1-b. Based on this information, should the division be eliminated?

A division of a large company reports the information shown below for a recent year. Variable costs and direct fixed costs are avoidable, and 50% of the indirect fixed costs are avoidable. Based on this information, should the division be eliminated? $265,000 146,000 Sales Variable costs Fixed costs Direct 39,000 53,000 $(27,000) Indirect Operating loss 1-a. Compare the amounts of total revenues and total avoidable expenses. 1-b. Based on this information, should the division be eliminated?

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter25: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 2BE

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