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Brums [2.3K]
4 years ago
12

San Ruiz Interiors provides design services to residential and commercial clients. The residential services produce a contributi

on margin of $450,000 and have traceable fixed operating costs of $480,000. Management is studying whether to drop the residential operation. If closed, the fixed operating costs will fall by $370,000 and San Ruiz’ income will:
Business
1 answer:
Sliva [168]4 years ago
8 0

Answer:

If closed the operating income  will decrease by 50,000

Is a better scenario to continue with the residential sercives

Explanation:

<em><u>current scenario:</u></em>

contribution margin 450,000

Fixed Cost 480,000

net loss 30,000

<em><u>drop scenario:</u></em>

contribution margin = 0

fixed cost 450,000-370,000 = 80,000

net loss (80,000)

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Explanation:

The questions is incomplete, the events that were experienced by the company during the two year are missing in the question. we will assume these events took place in order to illustrate through journal entries how transactions and events  affect the account balances mentioned in the question.

1. Knoll Company issued 100 shares at a price of $5 per share.

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journal entries

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3 years ago
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5 0
3 years ago
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Katyanochek1 [597]
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7 0
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