Carlton Corporation is composed of five divisions. Each division is allocated a share of Carlton's overhead to make divisional managers aware of the cost of running the corporate headquarters. The following information relates to the Metro Division: Sales revenue$7,500,000 Variable operating costs 5,100,000 Traceable fixed operating costs 1,900,000 Allocated corporate overhead 300,000 If the Metro Division is closed, 100% of the traceable fixed operating costs can be eliminated. What will be the impact on Carlton's overall profitability if the Metro Division is closed?
A. Decrease by $2,100,000.
B. Decrease by $2,400,000.
C. Decrease by $200,000.
D. Decrease by $500,000.
E. None of the answers is correct.
Answer: D
You might also like to view...
The schema we use to label someone as “lazy” versus “a go-getter” or “nice” versus “mean” is called interpersonal ______.
a. stereotypes b. prototypes c. constructs d. scripts
Audit firms should NOT customize the audit programs based on the assessment of the risk of material misstatement when auditing long-lived assets
a. True b. False Indicate whether the statement is true or false
Which of the following are characteristic of a ‘process theory of change’ compared to planned change?
a. Emphasis is on processes and time rather than on linearity frozen in time b. Change is multi-linear and multivariate, rather than a singularly linear event c. Power and political skills are critical for anyone seeking to change organizations d. All of the above
In calculating net cash from operating activities using the indirect method, an increase in prepaid expenses during a period is
A) deducted from net income. B) added to net income. C) ignored because it does not affect income. D) ignored because it does not affect expenses.