The Cook Corporation has two divisions--East and West. The divisions have the following revenues and expenses: EastWestSales$500,000 $550,000 Variable costs 200,000 275,000 Traceable fixed costs 150,000 180,000 Allocated common corporate costs 135,000 170,000 Net operating income (loss)$15,000 $(75,000)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:
A. ($155,000)
B. ($75,000)
C. ($60,000)
D. $15,000
Answer: A
You might also like to view...
Property, plant, and equipment must be reviewed for impairment when which one of the following events occurs?
A) A significant change in the asset's estimated useful life occurs. B) The costs of constructing the asset are determined to be less than the budgeted amount. C) A current period operating loss occurs. D) Investing activities produce a negative cash flow.
Under international accounting standards, if a sale-leaseback results in an operating lease then
a. any profit on the original sale is deferred and recognized over the life of the subsequent lease. b. any profit on the original sale is not recognized in the financial statements. c. any profit on the original sale is deferred and recognized over the life of the leased asset. d. assuming the original sale was clearly at fair value, any profit is recognized immediately even when the leaseback results in an operating lease.
If a nonverbal message contradicts a verbal message, ______.
A. the nonverbal message will carry the meaning B. the verbal message will carry the meaning C. the tone will be all that matters D. the message will need to be repeated
Which of the following completes the sentence, '______ are characterized by highly interconnected people such as hobbyists, fans, or professional groups'?
a. Support networks b. Tight crowds c. Brand clusters d. Community clusters e. Polarized crowds