Exercise F The luggage department of Sampson Company has revenues of $1,000,000; variable expenses of $250,000; direct fixed costs of $500,000; and allocated, indirect fixed costs of $300,000 in an average year. If the company eliminates this department, what would be the effect on net income

Decrease by $250,000

Explanation:

Calculation for what would be the effect on net income.

We would be using Differential Analysis method to find the effect on the net income

Differential Analysis

Continue with Luggage Department;Eliminate Luggage Department;Effect on Income

Sales

1,000,0000-1,000,000

Variable cost

-250,0000250,000

Direct fixed costs

-500,0000500,000

Indirect fixed costs

-300,000-300,0000

Net Income

-$50,000-$300,000-$250,000

Therefore in a situation where the luggage department is eliminated, the income would decrease by $250,000

c

explanation:

c because the item on a bank statement is also referred to as an account statement. in addition, it provides the beginning balance, ending balance, statement date, transaction date for each transaction, payee, customer name and address, statement period, the account holder's account number, and the bank's customer service number