value: 1.00 points A guitar manufacturer is considering eliminating its electric

Question

value: 1.00 points A guitar manufacturer is considering eliminating its electric guitar division because its $94,240 expenses are higher than its $87,890 sales. The company reports the following expenses for this division. Avoidable Expenses Unavoidable Expenses Cost of goods sold Direct expenses Indirect expenses Service department costs $63,500 11,750 560 11,800 $1,850 2,050 2,730 Should the division be eliminated? Kept Elmina Electric Guitar Division is Sales Expenses: Cost of goods sold 63,500 Direct expenses Indirect expenses Service department costs Total expenses Net income (loss) Revenues from electric guitar 63,500 division Avoidable expenses Revenues are greater than (less than) avoidable expenses by Kept

Explanation / Answer

Electric Division is Kept Eliminated Sales 87890 0 Expenses Cost of Goods sold 63500 0 Direct Expenses 13600 1850 Indirect Expenses 2610 2050 Service Department Costs 14530 2730 Total Expenses 94240 6630 Net Income -6350 -6630 Revenue from electric Avoidable Expenses Revenue are greater than The division should be kept due to less losses

Related Questions

Navigate

• Browse (All)
• Browse V
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.