ACCT 202 Study Guide - Final Guide: Fixed Cost, Earnings Before Interest And Taxes
Document Summary
South carolina corporation owns a single restaurant which has a bar primarily used to seat patrons while they wait for their tables. The company is considering eliminating the bar and adding more dining tables as the bar is showing a loss of ,500. Segmented contribution income statements are as follows and fixed costs applicable to both segments are allocated on the basis of sales. South carolina be better (or worse) off if they eliminate the bar: now assume that if the bar is eliminated, ,000 of allocated fixed costs could be avoided and restaurant sales would increase by ,000.
