Panasonic Corporation is a major Japanese multinational conglomerate company, headquartered in Kadoma, Osaka. Panasonic has six divisions. including a Television Division. In recent months, profits in the Television Division have been slightly negative, and management is evaluating whether to drop it. Management commissioned a study to determine if it should be discontinued. The contribution margin in the department is $70.000 per year. Fixed expenses charged to the department are $95,000 per year. It is estimated that $50,000 of these fixed expenses could be eliminated if the Television Division is discontinued. These data indicate that if the Division is discontinued, the yearly financial advantage (disadvantage) for the company would be:
Panasonic Corporation is a major Japanese multinational conglomerate company, headquartered in Kadoma, Osaka. Panasonic has six divisions. including a Television Division. In recent months, profits in the Television Division have been slightly negative, and management is evaluating whether to drop it. Management commissioned a study to determine if it should be discontinued. The contribution margin in the department is $70.000 per year. Fixed expenses charged to the department are $95,000 per year. It is estimated that $50,000 of these fixed expenses could be eliminated if the Television Division is discontinued. These data indicate that if the Division is discontinued, the yearly financial advantage (disadvantage) for the company would be:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:O
O
O
($25,000)
$20,000
($20,000)
$25,000
Transcribed Image Text:Panasonic Corporation is a major Japanese multinational conglomerate
company, headquartered in Kadoma, Osaka. Panasonic has six divisions,
including a Television Division. In recent months, profits in the Television Division
have been slightly negative, and management is evaluating whether to drop it.
Management commissioned a study to determine if it should be discontinued.
The contribution margin in the department is $70.000 per year. Fixed expenses
charged to the department are $95,000 per year. It is estimated that $50,000 of
these fixed expenses could be eliminated if the Television Division is
discontinued. These data indicate that if the Division is discontinued, the yearly
financial advantage (disadvantage) for the company would be:
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