The related data of Jin and Jimin Company:

Jin Jimin Total

Sales 2,750,000 2,370,000 5,120,000
Less: Variable Costs 1,375,000 1,422,000 2,797,000
Contribution Margin 1,375,000 948,000 2,323,000
Less: Fixed Costs 1,100,000 1,110,000 2,210,000
Net Income (Loss) 275,000 -162,000 113,000

The composition of the total fixed cost is as follows:

Jin Jimin Total
Supervisor's Salary 260,000 260,000 520,000
Rent Expense 600,000 600,000 1,200,000
Depreciation Expense - Machinery 90,000 100,000 190,000
Direct Fixed Costs 950,000 960,000 1,910,000
Allocable (50/50 share) 150,000 150,000 300,000
Total Fixed Cost 1,100,000 1,110,000 2,210,000

Solution:
Retain Dropped Differential
Sales 5,120,000 2,750,000 2,370,000
Less: Variable Costs 2,797,000 1,375,000 1,422,000
Contribution Margin 2,323,000 1,375,000 948,000
Less: Fixed Costs 2,210,000 1,350,000 860,000
Net Income (Loss) 113,000 25,000 88,000

Total Fixed Costs 2,210,000

Less: Avoidable Cost 860,000
Remaining balance of the fixed cost 1,350,000

What is the net disadvantage if dropped?

The decision is to drop the segment.Hence the decision to drop
the segment came from the differential analysis. The entity will decrease
the net loss from P113,000 to P88,000 under the two situations to
retain or shut down the segment.