Why should we keep the digital watch segment when its

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Why should we keep the digital watch segment when it’s showing a $100,000 loss?
12-32Beware of Allocated Fixed CostsThe answer lies in the way we allocate common fixed costs to our products.
12-33Beware of Allocated Fixed CostsOur allocations can make a segment look less profitable than it really is.Including unavoidable common fixed costs makes the product line appear to be unprofitable.
12-34Quick Check The following information relates to next year's projected operating results of the Aluminum Division of Wroclaw Corporation:Contribution margin $2,300,000 Fixed expenses2,500,000Net operating loss$ (200,000results of the Aluminum Division of Wroclaw Corporation:Contribution margin $2,300,000 Fixed expenses2,500,000Net operating loss$ (200,000If Aluminum Division is dropped, $1,000,000 of the above fixed costs would be eliminated. What will be the effect on Wroclaw's profit next year if Aluminum Division is dropped instead of being kept? )If Aluminum Division is dropped, $1,000,000 of the above fixed costs would be eliminated. What will be the effect on Wroclaw's profit next year if Aluminum Division is dropped instead of being kept?
The following information relates to next year's projected operating results of the Aluminum Division of Wroclaw Corporation:Contribution margin $2,300,000 Fixed expenses2,500,000Net operating loss$ (200,000If Aluminum Division is dropped, $1,000,000 of the above fixed costs would be eliminated. What will be the effect on Wroclaw's profit next year if Aluminum Division is dropped instead of being kept? )
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12-35Quick Check The following information relates to next year's projected operating results of the Aluminum Division of Wroclaw Corporation:Contribution margin $2,300,000 Fixed expenses2,500,000Net operating loss$ (200,000If Aluminum Division is dropped, $1,000,000 of the above fixed costs would be eliminated. What will be the effect on Wroclaw's profit next year if Aluminum Division is dropped instead of being kept? CM lost($2,300,000)Avoidable Fixed Expenses $1,000,000)
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12-36Learning Objective 3Prepare a make or buy analysis.
12-39Vertical Integration- DisadvantageCompanies may fail to take advantage of suppliers who can create economies of scale advantage by pooling demand from numerous companies. While the economics of scale factor can be appealing, a company must be careful to retain control over activities that are essential to maintaining its competitive position.

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