Thomas company has the following data for one of their recliners. this information is for the deluxe recliner model: sales $200,000 variable costs 90,000 contribution margin 110,000 fixed costs 150,000 operating income (loss) $(40,000) assume that if the deluxe recliner model is dropped, there would be a savings of 30% of the current fixed costs

If the division is discontinued theincome of the firm will decrease by 80,000

It is a financial disadvantage to do it.

Explanation:

The department data can be disclosure as follow:

contribution                 110,000

tracable fixed cost       (30,000) (20% ofthe fixed cost)

operating income         80,000

allocate fixed                (120,000) (150,000 - 30,000)

Result                             (40,000)

If the segment is discontinued; the other department will absorp the 80,000 which are currently taking by the deluxe recliner. Thus, income will drop by 80,000 if discontinued.

both are integral parts of a corporate balance sheet. the cash flow statement, or statement of cash flows, measures the sources of a company's cash and its uses of cash over a specific time period. the income statement measures a company's financial performance, such as revenues, expenses, profits or losses over a specific time period (in fact, it's sometimes called a statement of financial performance).

a cash flow statement shows exactly how much money a company has received and how much it has spent, traditionally over a period of one month. it captures the current operating results and changes on the balance sheet, such as increases or decreases in accounts receivable or accounts payable, and does not include noncash accounting items such as depreciation and amortization. the cash flow generally comes from revenue received as a result of business activity, but it may be augmented by funds available as a result of credit. a cash flow statement is used to determine the short-term viability and liquidity of a company, specifically how well it is positioned to pay its bills and vendors.

the answer is account d