Exercise 10-15 Dropping or Retaining a Segment [LO2] Boyle’s Home Center, a re

Question

Exercise 10-15 Dropping or Retaining a Segment [LO2]

Boyle’s Home Center, a retailing company, has two departments, Bath and Kitchen. The company’s most recent monthly contribution format income statement follows:

Department

A study indicates that $374,000 of the fixed expenses being charged to the Bath Department are sunk costs or allocated costs that will continue even if the Bath Department is dropped. In addition, the elimination of the Bath Department would result in a 14% decrease in the sales of the Kitchen Department.

If the Bath Department is dropped, what will be the effect on the net operating income of the company as a whole? (Input the amount as a positive value.)

Boyle’s Home Center, a retailing company, has two departments, Bath and Kitchen. The company’s most recent monthly contribution format income statement follows:

Explanation / Answer

Tables are not visible properly please repost I will be happy to your answer question

heres is how I am seeing

Department

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Department

 Total Bath Kitchen   Sales $ 4,360,000  $ 1,170,000  $ 3,190,000    Variable expenses  1,366,000   418,000   948,000     Contribution margin  2,994,000   752,000   2,242,000    Fixed expenses  2,260,000   890,000   1,370,000  please rate 5 star for help and explaination





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