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?
Homework Answers
Answer
| Particulars | All Divisions | Tennis Ball Division | All divisions eliminating Tennis ball division |
| Contribution Margin | 2,40,000 | 21,000 | 2,19,000 |
| Fixed Expenses | |||
| Supervisor Salaries | 1,10,000 | 18,000 | 1,10,000 |
| Depreciation, factory | 22,000 | 6,000 | 22,000 |
| Insurance, inventory | 14,000 | 4,000 | 14,000 |
| Profit/Loss | 94,000 | -7,000 | 73,000 |
If the company eliminates the tennis ball division. the profit will decrease by 21,000. Thus change in Profit/loss by eliminating tennis division is $ 73,000 - $ 94,000 = - 22.35%.
$ 94,000
Thus, it is advisable to continue operating Tennis ball division
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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...
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?
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?
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