Homework Answers
| Contribution margin on commercial devision-lost benefit | -42200 | ||||
| fixed cost (avoidable ) of commercial division | 100000 | ||||
| net benefit | 57800 | ||||
| elimination of commercial division result $57800 increase | |||||
| Option $57800 increase is correct | |||||
| calculation of total increase or decrease in net income | |||||
| cost of new machine | 120000 | ||||
| less: sale value of old | -22000 | ||||
| net | 98000 | ||||
| saving per year | 19000 | ||||
| total saving -4 years (19000*4) | 76000 | ||||
| decrease by replacing the current (98000-76000) | 22000 | ||||
| Option $22000 decrease Is Correct | |||||
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