A company producing balls has four divisions, including the tennis ball division. Below is some information...

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A company producing balls has four divisions, including the tennis ball division. Below is some information...

A company producing balls has four divisions, including the tennis ball division. Below is some information related to the divisions (in TL):

All Divisions Tennis Ball Division

Contribution Margin 240,000 21,000

Fixed Expenses

Supervisor salaries 110,000 18,000

Depreciation, factory 22,000 6,000

Insurance, inventory 14,000 4,000

Profit/Loss 94,000 (7,000)

If the Tennis Ball division is eliminated, what will be the change in profit or loss for the company?

business accounting

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Answer 1

Answer #1

If tennis ball division is eliminated then company loss would be :

Supervisor salary :(18,000)

Deprecation factory ; (6,000)

insurance in inventory assuming as there is no stock so no insurance needed.

total loss will be added to the company is (24,000)

so the contribution of loss will up from (7,000) to (24,000)

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Answer 2

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