A division of a large company reports the information shown below for a recent year....
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Accounting
A division of a large company reports the information shown below for a recent year. Variable costs and direct fixed costs are avoidable, and 45% of the indirect fixed costs are avoidable. Based on this information, should the division be eliminated? $ 275,000 Sales Variable costs 155,000 Fixed costs Direct 39,000 54,000 Indirect $ (27,000) Operating loss 1-a. Compare the amounts of total revenues and total avoidable expenses. Revenues Avoidable expenses Revenues are greater than (less than) avoidable expenses by 1-b. Based on this information, should the division be eliminated? Yes No
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