The Kelsh Company has two divisions--North and South. The divisions have the following revenues and expenses: North South Sales £900,000 £800,000 Variable expenses 450,000 300,000 Traceable fixed expenses 260,000 210,000 Allocated common corporate expenses 240,000 190,000 Operating profit (loss) £(50,000) £100,000 Management at Kelsh is pondering the elimination of North Division. If North Division were eliminated, its traceable fixed expenses could be avoided. The total common corporate expenses would be unaffec
The Kelsh Company has two divisions--North and South. The divisions have the following revenues and expenses: North South Sales £900,000 £800,000 Variable expenses 450,000 300,000 Traceable fixed expenses 260,000 210,000 Allocated common corporate expenses 240,000 190,000 Operating profit (loss) £(50,000) £100,000 Management at Kelsh is pondering the elimination of North Division. If North Division were eliminated, its traceable fixed expenses could be avoided. The total common corporate expenses would be unaffec
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The Kelsh Company has two divisions--North and South. The divisions have the following revenues and expenses:
North South
Sales £900,000 £800,000
Variable expenses 450,000 300,000
Traceable fixed expenses 260,000 210,000
Allocated common corporate expenses 240,000 190,000
Operating
Management at Kelsh is pondering the elimination of North Division. If North Division were eliminated, its traceable fixed expenses could be avoided. The total common corporate expenses would be unaffected. Given these data, the elimination of North Division would result in an overall company operating profit of:
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