Cabells, Inc

question 71

Essay

Cabells, Inc.has two divisions - Electronics and Appliances.The divisions have provided the following financial information: Cabells' executives are considering the elimination of the Electronics division.If the division is eliminated, the common fixed costs will remain unchanged.Given these data, should the Electronics division be eliminated? Why?

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Definitions:

Debited

In accounting, this term indicates that an entry has been made to the left side of an account, increasing assets or expenses, or decreasing equity, liability, or revenue.

Proprietorship

A business structure owned by a single individual, where the owner is personally responsible for the business's debts and liabilities.

Withdrawal

Removing funds from an account, or the act of taking money out from a partnership or investment, often referring to the distribution of assets to owners or partners.

Unearned Revenue

Money received by an individual or company for a service or product yet to be provided or delivered.