GIGO Computers has two divisions that manufacture computing devices. Below are the results from last year.Sales RevenueVariable Cost of Goods SoldFixed Cost of Goods SoldGross ProfitLaptopTabletTotal$ 14,500,000.00 $ 36,000,000.00 $ 50,500,000.00$9,500,000.00 $ 23,400,000.00 $ 32,900,000.00$ 1,400,000.00 $ 1,880,000.00 $ 3,280,000.003,600,000.00 $ 10,720,000.00 $ 14,320,000.001,850,000.00 $ 5,760,000.00 $ 7,610,000.00840,000.00 $ 1,740,000.001,300,000.00 $2,500,000.002,820,000.00 $ 2,470,000.00Variable Operating Expenses $bed Operating Expenses $Common Fixed Costs$Operating Income-$900,000.00 $1,200,000.00 $350,000.00 $GMEDMeng Wanzhou, the President of GIGO is not happy that the laptop division is losing money.a) Prepare a segment margin income statement. Fixed cost of goods sold, and fixed operating expenses can be traced to each division. (6 marks)b) Should Meng keep or close the laptop division? (1 mark)

Segment Margin: Segment margin refers to the calculation of profit for each product line / segment…

GIGO Computers has two divisions that manufacture computing devices. Below are the results from last year. Laptop Tablet Total $ $ 14,500,000.00 $ 36,000,000.00 $ 50,500,000.00 9,500,000.00 $ 23,400,000.00 $ 32,900,000.00 1,400,000.00 $ 1,880,000.00 $3,280,000.00 3,600,000.00 $ 10,720,000.00 $ 14,320,000.00 $ Gross Profit $ Variable Operating Expenses $ 1,850,000.00 $ 5,760,000.00 $ 7,610,000.00 Fixed Operating Expenses $ 900,000.00 $ 840,000.00 $ 1,740,000.00 Common Fixed Costs $ 1,200,000.00 $ 1,300,000.00 $S 2,500,000.00 Operating Income 350,000.00 $2,820,000.00 S 2,470,000.00 Sales Revenue Variable Cost of Goods Sold Fixed Cost of Goods Sold -$ Meng Wanzhou, the President of GIGO is not happy that the laptop division is losing money. Prepare a segment margin income statement. Fixed cost of goods sold, and fixed operating expenses can be traced to each division. (6 marks) b) Should Meng keep or close the laptop division? (1 mark)

GIGO Computers has two divisions that manufacture computing devices. Below are the results from last year. Laptop Tablet Total $ $ 14,500,000.00 $ 36,000,000.00 $ 50,500,000.00 9,500,000.00 $ 23,400,000.00 $ 32,900,000.00 1,400,000.00 $ 1,880,000.00 $3,280,000.00 3,600,000.00 $ 10,720,000.00 $ 14,320,000.00 $ Gross Profit $ Variable Operating Expenses $ 1,850,000.00 $ 5,760,000.00 $ 7,610,000.00 Fixed Operating Expenses $ 900,000.00 $ 840,000.00 $ 1,740,000.00 Common Fixed Costs $ 1,200,000.00 $ 1,300,000.00 $S 2,500,000.00 Operating Income 350,000.00 $2,820,000.00 S 2,470,000.00 Sales Revenue Variable Cost of Goods Sold Fixed Cost of Goods Sold -$ Meng Wanzhou, the President of GIGO is not happy that the laptop division is losing money. Prepare a segment margin income statement. Fixed cost of goods sold, and fixed operating expenses can be traced to each division. (6 marks) b) Should Meng keep or close the laptop division? (1 mark)

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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