
1.
Increase or decrease in the operating income in 2014.
Given information:
2014,
Cost of goods sold of A is 440,000.
Cost of goods sold of B is 930,000.
Selling, general and administrative expense of A is $96,000.
Selling, general and administrative expense of B is $202,500.
Percentage of cost of goods sold of A is 90%.
Percentage of cost of goods sold of B is 80%.
Percentage of Selling, general and administrative expense of A is 50%.
Percentage of Selling, general and administrative expense of A is 50%.
Saving on the fixed cost is 40%.
2.
Increase or decrease in the operating income.
3.
To identify: factor which should be considered before taking the decision of division.

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Chapter 11 Solutions
Cost Accounting, Student Value Edition Plus MyAccountingLab with Pearson eText -- Access Card Package (15th Edition)
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