The Dropinsky Company's management wants to determine if Segment B should be eliminated.The following data are available (in thousands).

a.Assuming all direct fixed costs of Segment B are avoidable,what would be the change in operating income if Segment B were eliminated?
b.Assuming one-half of the direct fixed costs of Segment B are avoidable,what would be the change in operating income if Segment B were eliminated?

Question

The Dropinsky Company's management wants to determine if Segment B should be eliminated.The following data are available (in thousands).
 
a.Assuming all direct fixed costs of Segment B are avoidable,what would be the change in operating income if Segment B were eliminated?
b.Assuming one-half of the direct fixed costs of Segment B are avoidable,what would be the change in operating income if Segment B were eliminated?

Quizplus · Accepted Answer

The Answer of The Dropinsky Company's management wants to determine if Segment B should be eliminated.The following data are available (in thousands).
 
a.Assuming all direct fixed costs of Segment B are avoidable,what would be the change in operating income if Segment B were eliminated?
b.Assuming one-half of the direct fixed costs of Segment B are avoidable,what would be the change in operating income if Segment B were eliminated?

The Dropinsky Company's Management Wants to Determine If Segment B