The Coleman Company has two departments - 101 and 102. Data on the two departments for the most current fiscal year is as follows: Item Dept 101 Dept 102 Sales $1,345,000 $2,625,000 Variable costs 930,000 1,125,000 Fixed costs 469,500 |617,500 Coleman is considering eliminating Department 101. If Department 101 is eliminated, the sales of Department 102 will increase by 11%, and $132,500 of Department 101's fixed costs will be avoidable. Calculate the incremental change in the company's income if Department 101 w eliminated.

The Coleman Company has two departments - 101 and 102. Data on the two departments for the most current fiscal year is as follows: Item Dept 101 Dept 102 Sales $1,345,000 $2,625,000 Variable costs 930,000 1,125,000 Fixed costs 469,500 |617,500 Coleman is considering eliminating Department 101. If Department 101 is eliminated, the sales of Department 102 will increase by 11%, and $132,500 of Department 101's fixed costs will be avoidable. Calculate the incremental change in the company's income if Department 101 w eliminated.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 14EB: Company A has current sales of $4,000,000 and a 45% contribution margin. Its fixed costs are...

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