The Corporation has three departments,Widgets,Ridgets and Digits.At the end of the accounting period the following information is available. $\begin{array}{|l|r|r|r|r|}
\hline & \text { Widgets } & \text { Ridgets } & \text { Digits } & \text { Total } \
\hline \text { Net Sales } & \$ 5000 & \$ 9000 & \$ 6000 & \$ 20000 \
\hline \text { Cost of sales }& \underline{3000} & \underline{400} & \underline{2400} & \underline{900} \
\hline \text { Gross Profit }&\$ 2000 & 4500 & \$ 3600 & \$ 10100 \
\hline \text { Direct Operating Exps }&\underline{500} & \underline{1000} & \underline{1500} & {3000} \
\hline \text { Departmental Margin }&1500 & \$ 3500 & \$ 2100 & \$ 7100 \
\hline \text { Indirect Operating Exps }&& & & \underline{3000} \
\hline \text { Profit }&& & & \$ 4100 \
\hline
\end{array}$ The Corporation is considering eliminating the Widgets department.What will be the change in The Corporation's profit if the Widgets department is eliminated? Assume that all indirect expenses are unavoidable and that all other circumstances are held constant.

Question

The Corporation has three departments,Widgets,Ridgets and Digits.At the end of the accounting period the following information is available. $\begin{array}{|l|r|r|r|r|}
\hline & \text { Widgets } & \text { Ridgets } & \text { Digits } & \text { Total } \
\hline \text { Net Sales } & \$ 5000 & \$ 9000 & \$ 6000 & \$ 20000 \
\hline \text { Cost of sales }& \underline{3000} & \underline{400} & \underline{2400} & \underline{900} \
\hline \text { Gross Profit }&\$ 2000 & 4500 & \$ 3600 & \$ 10100 \
\hline \text { Direct Operating Exps }&\underline{500} & \underline{1000} & \underline{1500} & {3000} \
\hline \text { Departmental Margin }&1500 & \$ 3500 & \$ 2100 & \$ 7100 \
\hline \text { Indirect Operating Exps }&& & & \underline{3000} \
\hline \text { Profit }&& & & \$ 4100 \
\hline 
\end{array}$ The Corporation is considering eliminating the Widgets department.What will be the change in The Corporation's profit if the Widgets department is eliminated? Assume that all indirect expenses are unavoidable and that all other circumstances are held constant.

Quizplus · Accepted Answer

The Answer of The Corporation has three departments,Widgets,Ridgets and Digits.At the end of the accounting period the following information is available. $\begin{array}{|l|r|r|r|r|}
\hline & \text { Widgets } & \text { Ridgets } & \text { Digits } & \text { Total } \
\hline \text { Net Sales } & \$ 5000 & \$ 9000 & \$ 6000 & \$ 20000 \
\hline \text { Cost of sales }& \underline{3000} & \underline{400} & \underline{2400} & \underline{900} \
\hline \text { Gross Profit }&\$ 2000 & 4500 & \$ 3600 & \$ 10100 \
\hline \text { Direct Operating Exps }&\underline{500} & \underline{1000} & \underline{1500} & {3000} \
\hline \text { Departmental Margin }&1500 & \$ 3500 & \$ 2100 & \$ 7100 \
\hline \text { Indirect Operating Exps }&& & & \underline{3000} \
\hline \text { Profit }&& & & \$ 4100 \
\hline 
\end{array}$ The Corporation is considering eliminating the Widgets department.What will be the change in The Corporation's profit if the Widgets department is eliminated? Assume that all indirect expenses are unavoidable and that all other circumstances are held constant.

The Corporation Has Three Departments,Widgets,Ridgets and Digits The Corporation Is Considering Eliminating the Widgets Department