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Disney Corporation currently has two divisions which had the following operating results for last year: Theme Park Movie Division Division 350,000 220,000 Sales 600,000 250,000 Variable costs Contribution margin 350,000 130,000 Traceable fixed costs 160,000 110,000 Segment margin Allocated common corporate fixed costs Net operating income (loss) 190,000 80,000 20,000 50,000 110,000 (30,000) Because the Theme Park Division sustained a loss due to Covid, the CEO of Disney is considering the elimination of this division. All of the division's traceable fixed costs could be avoided if the division was dropped. None of the allocated common corporate fixed costs could be avoided. Given these data, the elimination of the Theme Park Division would result in an overall company net operating income (loss) of: O (S20,000) O $60,000 O $110,000 O $80,000

Disney Corporation currently has two divisions which had the following operating results for last year: Theme Park Movie Division Division 350,000 220,000 Sales 600,000 250,000 Variable costs Contribution margin 350,000 130,000 Traceable fixed costs 160,000 110,000 Segment margin Allocated common corporate fixed costs Net operating income (loss) 190,000 80,000 20,000 50,000 110,000 (30,000) Because the Theme Park Division sustained a loss due to Covid, the CEO of Disney is considering the elimination of this division. All of the division's traceable fixed costs could be avoided if the division was dropped. None of the allocated common corporate fixed costs could be avoided. Given these data, the elimination of the Theme Park Division would result in an overall company net operating income (loss) of: O (S20,000) O $60,000 O $110,000 O $80,000

FINANCIAL ACCOUNTING
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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Disney Corporation currently has two divisions which had the following operating results for last year: Theme Park Movie Division Division Sales Variable costs 600,000 250,000 350,000 220,000 130,000 110,000 20,000 Contribution margin 350,000 160,000 Traceable fixed costs Segment margin Allocated common corporate fixed costs Net operating income (loss) 190,000 80,000 50,000 110,000 (30,000) Because the Theme Park Division sustained a loss due to Covid, the CEO of Disney is considering the elimination of this division. All of the division's traceable fixed costs could be avoided if the division was dropped. None of the allocated common corporate fixed costs could be avoided. Given these data, the elimination of the Theme Park Division would result in an overall company net operating income (loss) of: O ($20,000) O $60,000 O $110,000 O $80,000
Transcribed Image Text:Disney Corporation currently has two divisions which had the following operating results for last year: Theme Park Movie Division Division Sales Variable costs 600,000 250,000 350,000 220,000 130,000 110,000 20,000 Contribution margin 350,000 160,000 Traceable fixed costs Segment margin Allocated common corporate fixed costs Net operating income (loss) 190,000 80,000 50,000 110,000 (30,000) Because the Theme Park Division sustained a loss due to Covid, the CEO of Disney is considering the elimination of this division. All of the division's traceable fixed costs could be avoided if the division was dropped. None of the allocated common corporate fixed costs could be avoided. Given these data, the elimination of the Theme Park Division would result in an overall company net operating income (loss) of: O ($20,000) O $60,000 O $110,000 O $80,000
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