Author Question: Jerry Mounds, controller for Pearl Distributing, has prepared the following financial information ... (Read 8 times)

Aimless0988 · **on:** Feb 5, 2023

Jerry Mounds, controller for Pearl Distributing, has prepared the following financial information for the most recent period showing profitability the of its three departments:

Department A

Department B

Department C

Sales	$52,000	$18,000	$20,000
Variable expenses	36,000	10,000	14,000
Contribution margin	16,000	8,000	6,000
Fixed expenses:
Factory rent	2,000	1,400	3,200
Depreciation	2,000	600	2,600
Utilities	1,800	1,000	1,200
Total fixed expenses	5,800	3,000	7,000
Operating income	$10,200	$ 5,000	($1,000)

The factory rent of $3,200 assigned to Department C is avoidable if the department is eliminated. Depreciation will remain unchanged if a department is dropped. Discontinuing Department C will reduce the utilities by $600.

Required:

Prepare an analysis showing whether Department C should be eliminated.

heathercab · **Reply #1 on:** Feb 5, 2023

A FREE account is required to view all solutions!

Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.

Answer Preview

Only 30% of students answer this correctly