Kelsh Company has two divisions--North and South. The divisions have these revenues and expenses:

Management at Kelsh is considering 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.
Elimination of the North Division will not cause and increase or decrease in revenue for South Division.
The elimination of North Division would result in an overall company net operating income of:
A. $100,000
B. $150,000
C. $(140,000)
D. $50,000

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North South $8,00,000 ($4,00,000) $9,00,000 ($4,50,000) Sales Variable expenses Traceable fixed expenses ($2,10,000) ($90,000) Allocated common corp expenses Net operating income ($2,40,000) ($50,000) $1,00,000