Answer:
A) operating income decreases by $84,000
Explanation:
Sales $700,000 ⇒ ELIMINATED, SINCE THE PRODUCTS WILL NOT BE SOLD ANYMORE
Variable Expenses ($430,000) ⇒ ELIMINATED, SINCE THE PRODUCTS WILL NOT BE SOLD ANYMORE
Fixed Expenses ($310,000) ⇒ REDUCED BY 60% TO ($124,000)
Operating Loss ($40,000) ⇒ INCOME WILL DECREASE IN TOTAL BY $124,000
Since the total decrease income will be $124,000, that represents = $124,000 (unavoidable fixed costs) - $40,000 (current loss) = $84,000 in additional losses
Answer:
i am having a hard time unstanding you can you elaborate
Answer:
<u>True</u>
Explanation:
According to the IRS tax guidelines in such a case the unreimbursed amount is deductible as an itemized deduction from tax returns.
What this implies for Mr. and Mrs. Jones is that the $12,000 unreimbursed amount would be deducted from their tax return. <u>Thus, reducing the amount of taxes to be paid by them.</u>
It shows that the owner acknowledges the financial risks and is willing to pay every month to transfer the risk to an insurance company.
