QS 23-12 Segment elimination LO P4 A guitar manufacturer is considering eliminating its electric guitar...
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QS 23-12 Segment elimination LO P4 A guitar manufacturer is considering eliminating its electric guitar division because its $76,000 expenses are higher than its $72,000 sales. The company reports the following expenses for this division Avoidable Unavoidable Expenses Expenses Cont of goods sold $56,000 Direct expenses 9,250 51.250 Indirect expenses 470 1,600 Service department costs 6,000 1.430 OK Should the division be eliminated? (Any loss amount should be indicated with minus sign.) Kept Eliminated Electric Guitar Division is: Sales Expenses nces Total expenses Net income (oss) Revenues from electric guitar division Avoidable expenses Revenues are greater than (less than avoidable expenses by
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