Reference no: EM131202258
Following are the operating results of the two segments of Parklin Corporation: Segment A Segment B Total Sales $10,000 $15,000 $25,000 Variable costs of goods sold 4,000 8,500 12,500 Fixed costs of goods sold 1,500 2,500 4,000 Gross margin 4,500 4,000 8,500 Variable selling and administrative 2,000 3,000 5,000 Fixed selling and administrative 1,500 1,500 3,000 Operating income (loss) $1,000 ($500) $500 Variable costs of goods sold are directly related to the operating segments. Fixed costs of goods sold are allocated to each segment based on the number of employees. Fixed selling and administrative expenses are allocated equally. If Segment B is eliminated, $1,500 of fixed costs of goods sold would be eliminated. Assuming Segment B is closed, the effect on operating income would be
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: Following are the operating results of the two segments of Parklin Corporation: Segment A Segment B Total Sales $10,000 $15,000 $25,000 Variable costs of goods sold 4,000 8,500 12,500 Fixed costs of goods sold 1,500 2,500 4,000 Gross margin 4,500 4,0..
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