Vernon transport company divides its operations into four divisions. A recent statement for its West Division folows Vernon Transport Comapny Wesy division Income Statement for year 3 Revenue $670,000 Salaries for drivers (520,000) Fuel expenses (67,000) Insurance (87,000) Division-level facility- sustaining costs (57,000) Companywide facility-sustaining costs (147,000) Net loss $208,000 Required a) By how much would cormpanywide income increase or decrease if West Division is estimated? Should West Division be eliminated? b) assume that West Division is able to increase its revenue to $760,000 by raising its prices. Determine the amount of the increase or decrease that would occur in companywide net income if the segemnt were eliminated. Should West Division be eliminated if revenue were $760,000? c) What is the mininum amount of revenue required to Jusify continuing the operation of West Divison? Complete this question by entering your answer in the table below. Income Would by-------- Should West Divsion be eliminated
Vernon transport company divides its operations into four divisions. A recent statement for its West Division folows
Vernon Transport Comapny Wesy division Income Statement for year 3
Revenue $670,000
Salaries for drivers (520,000)
Fuel expenses (67,000)
Insurance (87,000)
Division-level facility- sustaining costs (57,000)
Companywide facility-sustaining costs (147,000)
Net loss $208,000
Required
a) By how much would cormpanywide income increase or decrease if West Division is estimated? Should West Division be eliminated?
b) assume that West Division is able to increase its revenue to $760,000 by raising its prices. Determine the amount of the increase or decrease that would occur in companywide net income if the segemnt were eliminated. Should West Division be eliminated if revenue were $760,000?
c) What is the mininum amount of revenue required to Jusify continuing the operation of West Divison?
Complete this question by entering your answer in the table below.
Income Would by--------
Should West Divsion be eliminated
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