The Cook Corporation has two divisions--East and West. The divisions have the following revenues and expenses: Sales Variable costs Traceable fixed costs Allocated common corporate costs Net operating income (loss) East $ 550,000 West $489,500 198,000 169,500 117,500 $ 65,000 258,500 194,400 141,100 $ (104,500) 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: Multiple Choice $65,000 $(104,500) $(39,500) О $(76,100)
The Cook Corporation has two divisions--East and West. The divisions have the following revenues and expenses: Sales Variable costs Traceable fixed costs Allocated common corporate costs Net operating income (loss) East $ 550,000 West $489,500 198,000 169,500 117,500 $ 65,000 258,500 194,400 141,100 $ (104,500) 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: Multiple Choice $65,000 $(104,500) $(39,500) О $(76,100)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Cook Corporation has two divisions--East and West. The divisions have the following revenues and expenses:
Sales
Variable costs
Traceable fixed costs
Allocated common corporate costs
Net operating income (loss)
East
$ 550,000
West
$489,500
198,000
169,500
117,500
$ 65,000
258,500
194,400
141,100
$ (104,500)
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:
Multiple Choice
$65,000
$(104,500)
$(39,500)
О
$(76,100)
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