Q13
Single choice
Essentials inc. operates two segments. Segment A and Segment B information about the revenues and costs for Essentials tot the previous year (by segment) is shown below
The above analysis shows that Segment A is not profitable if Segment A is dropped, the revenues associated with the account will be lost and the related variable costs win be eliminated.
Also, the space freed by this product line will be rented for $40.000. The operating profit (loss) after dropping Segment A will be