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Marin Company makes several products, including canoes. The company reports a loss from its canoe segment (see below). All its variable costs are avoidable, and $325,000 of its fixed costs are avoidable. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,078,000 770,000 308,000 370,000 $ (62,000) (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be continued or eliminated?

Marin Company makes several products, including canoes. The company reports a loss from its canoe segment (see below). All its variable costs are avoidable, and $325,000 of its fixed costs are avoidable. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,078,000 770,000 308,000 370,000 $ (62,000) (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be continued or eliminated?

FINANCIAL ACCOUNTING
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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Marin Company makes several products, including canoes. The company reports a loss from its canoe segment (see below). All its variable costs are avoidable, and $325,000 of its fixed costs are avoidable. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,078,000 770,000 308,000 370,000 $ (62,000) (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be continued or eliminated? Complete this question by entering your answers in the tabs below. Required A Required B Compute the income increase or decrease from eliminating this segment. Segment Elimination Analysis Continue Eliminate Income Increase (Decrease) 0 0 Income (loss) $ 0 $ 0 $ 0
Transcribed Image Text:Marin Company makes several products, including canoes. The company reports a loss from its canoe segment (see below). All its variable costs are avoidable, and $325,000 of its fixed costs are avoidable. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,078,000 770,000 308,000 370,000 $ (62,000) (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be continued or eliminated? Complete this question by entering your answers in the tabs below. Required A Required B Compute the income increase or decrease from eliminating this segment. Segment Elimination Analysis Continue Eliminate Income Increase (Decrease) 0 0 Income (loss) $ 0 $ 0 $ 0
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