The Cook Corporation has two divisions--East and West. The divisions have the following revenues and expenses. East West $590,000 $ 456,500 Variable costs 232,000 294,300 Traceable fixed costs 144,000 160,200 Allocated common corporate costs 151,200 188,700 Net operating income (loss) O $(123,900) Sales The management of Cook is considering the elimination of the West Division. 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 (loss) of: O $62,800 O $(186,700) O $(125,900) $62,800 $(186,700)

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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The Cook Corporation has two divisions--East and West. The divisions have the following revenues and expenses:
East
West
$ 590,000 $ 456,500
Sales
Variable costs
Traceable fixed costs
Allocated common corporate costs 151,200
Net operating income (loss)
232,000 294,300
144,000 160,200
188,700
$62,800 $ (186,700)
The management of Cook is considering the elimination of the West Division. 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 (loss) of:
O $(123,900)
O $62,800
O $(186,700)
O $(125,900)
Transcribed Image Text:The Cook Corporation has two divisions--East and West. The divisions have the following revenues and expenses: East West $ 590,000 $ 456,500 Sales Variable costs Traceable fixed costs Allocated common corporate costs 151,200 Net operating income (loss) 232,000 294,300 144,000 160,200 188,700 $62,800 $ (186,700) The management of Cook is considering the elimination of the West Division. 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 (loss) of: O $(123,900) O $62,800 O $(186,700) O $(125,900)
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