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Compare total revenues and total avoidable expenses

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Question - A division of a large company reports the information shown below for a recent year. Variable costs and direct fixed costs are avoidable, and 50% of the indirect fixed costs are avoidable. Based on this information, should the division be eliminated?

Sales $275,000 Variable costs 146,000 Fixed costs   Direct 36,000 Indirect 51,000 Operating loss $(42,000)

1-a. Compare the amounts of total revenues and total avoidable expenses.

1-b. Based on this information, should the division be eliminated?

Reference no: EM133003466

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