During 2017, Honeydew Corp Disposed of Blackberry Division, a Major

question 36

Short Answer

During 2017, Honeydew Corp disposed of Blackberry Division, a major segment of its business.Honeydew realized a gain of $1,500,000, net of taxes, on the sale of Blackberry's assets.During 2017, Raspberry's operating losses, net of taxes, were $1,800,000.How should these facts be reported in Honeydew's income statement for 2017?

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Definitions:

Step-Variable Cost

Costs that are fixed over a small range of activity but can change with significant changes in the volume of activity.

Sunk Cost

Expenses already incurred and which cannot be recovered, and should not be considered when making future business decisions.

Direct Manufacturing Cost

The sum of all costs directly tied to the production process, including direct labor and raw materials.

Manufacturing Overhead

Costs incurred in the production process that are not directly associated with individual units, including indirect materials, labor, and utilities, vital for operational continuity.