Sales $200,000 Varlable costs..... Fixed costs 145,000 Direct 30,000 Indirect.. 50,000 Operating loss. $(25,000)

Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter14: Decentralized Operations
Section: Chapter Questions
Problem 3SEQ: Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of...
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A division of a large company reports the information shown below for a recent year. Variable costs and direct fixed costs are avoidable, and 40% of the indirect fixed costs are avoidable. Based on this information, should the division be eliminated?

Sales
$200,000
Varlable costs.....
Fixed costs
145,000
Direct
30,000
Indirect..
50,000
Operating loss.
$(25,000)
Transcribed Image Text:Sales $200,000 Varlable costs..... Fixed costs 145,000 Direct 30,000 Indirect.. 50,000 Operating loss. $(25,000)
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