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)
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)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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