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Wilson Co. has three segments -- Tennis, Golf, and Fishing. The Tennis segment is currently producing 2,000 units annually. The units sell for $200 each. The cost of each unit Wilson produces is $110.
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Wilson Co. has three segments -- Tennis, Golf, and Fishing. The Tennis segment is currently producing 2,000 units annually. The units sell for $200 each. The cost of each unit Wilson produces is $110. The Tennis segment spends $100,000 on product design each year. The segment also is allocated $200,000 of annual facility-level costs. Calculate the differential revenue if Wilson Co. were to eliminate the Tennis segment. Multiple choice question. $200,000 $400,000 $100,000 $180,000

User Nitty
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6 votes

Answer:

$400,000

Step-by-step explanation:

Calculation to determine the differential revenue if Wilson Co. were to eliminate the Tennis segment

Differential revenue= $200x2,000 units

Differential revenue= $400,000

Therefore the differential revenue if Wilson Co. were to eliminate the Tennis segment will be $400,000

User Xywang
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