The Alligator segment of Louisiana Specialty Meats is operating at a loss and has the following data: Sales $600,000 Variable expenses 420,000 Fixed expenses 300,000 If the Alligator segment is eliminated, what will be the effect on the remaining company? Assume that 50% of the fixed expenses will be eliminated and the rest will be allocated to the segments of the remaining company. $150,000 increase. $30,000 decrease. $360,000 increase. $30,000 increase.

$30,000 decrease

Explanation:

The computation of the effect of the remaining company is shown below:

Sales$600,000        

Less: variable Expenses -$420,000        

Contribution$180,000        

Less: Fixed Cost$150,000  ($300,000 × 50%)      

Net Income$30,000

If Alligator segment is eliminated, the net income should be decreased by  $30,000

We applied the above computation so the proper effect could arrive

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is this good enough?

1. avoid them

2. a talk with them

3. ask someone you trust

4. ignore

5. call police