A segment has the following data:

What will be the incremental effect on net income if this segment is eliminated, assuming the fixed costs will be allocated to profitable segments?
A) $284,500 increase
B) $386,000 decrease
C) $264,000 decrease
D) $365,500 decrease

Question

A segment has the following data:

What will be the incremental effect on net income if this segment is eliminated, assuming the fixed costs will be allocated to profitable segments?
A) $284,500 increase 
B) $386,000 decrease 
C) $264,000 decrease 
D) $365,500 decrease

Quizplus · Accepted Answer

Change in net income = $650,000 - $386,000 = $264,000 decrease

A Segment Has the Following Data