. The Milbam Company has two divisions - East and West. The divisions have the following revenues and expenses: East West Sales P720,000 P350,000 Variable costs 370,000 130,000 240,000 Traceable fixed costs 80,000 Allocated common corporate costs Net operating income (loss) 50,000 P100,000 | P (20,000) 120,000| Management at Milham is pondering the elimination of the West Division since it has shown an operating loss for the past several years. If the West Division were eliminated, its traceable fixed costs could be avoided. Total common corporate costs would be unaffected by this decision. Given these data, the elimination of the West Division would result in an overall company net operating income of: O P100,000 O P50,000 O P120,000 O P80,000

. The Milbam Company has two divisions - East and West. The divisions have the following revenues and expenses: East West Sales P720,000 P350,000 Variable costs 370,000 130,000 240,000 Traceable fixed costs 80,000 Allocated common corporate costs Net operating income (loss) 50,000 P100,000 | P (20,000) 120,000| Management at Milham is pondering the elimination of the West Division since it has shown an operating loss for the past several years. If the West Division were eliminated, its traceable fixed costs could be avoided. Total common corporate costs would be unaffected by this decision. Given these data, the elimination of the West Division would result in an overall company net operating income of: O P100,000 O P50,000 O P120,000 O P80,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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