A Segment Has the Following Data: What Will Be

question 56

Multiple Choice

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)$15,000 increase
• B)$155,000 decrease
• C)$140,000 decrease
• D)$145,000 decrease

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Definitions:

Economic Strategy

A plan of action designed to achieve specific financial or market objectives.

Exports

Items or services that are manufactured in one nation and purchased by consumers in a different country.

Imports

Goods or services brought into a country from abroad for sale or use.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service versus what they actually pay, representing a measure of consumer benefit.