A segment of Hazard Inc. has the following data.
|
Sales revenue Don't use plagiarized sources. Get Your Custom Essay on
if this segment is eliminated 50 of the fixed costs will be eliminated and the rest 610689
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|
$200,000 |
|
Variable costs |
$140,000 |
|
Fixed costs |
$100,000 |
If this segment is eliminated, 50% of the fixed costs will be eliminated, and the rest will be allocated to the remaining segments. What should Hazard do?
(a)Eliminate the segment; net income will be $50,000 greater.
(b)Eliminate the segment; net income will be $10,000 greater.
(c)Keep the segment; net income will be $200,000 greater.
(d)Keep the segment; net income will be $10,000 greater.
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