5. The Cook Corporation has two divisions--East and West. The divisions have the following revenues and expenses: 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. $(75,000) b. 75,000 c. (20,000) d. 20,000 e. None of the above. The answer is 6. Premium Corporation produces10,000 parts each year, which are used in the production of One of its products. The unit product cost of a part is $36, computed as follows: Variable production cost Fixed production cost Unit product cost The parts can be purchased from an outside supplier for only $26 each. The space in which the parts are now produced would be idle and fixed production costs would be reduced by onefourth. Based on these data, the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be: a. $56,000 b. ($56,000) c. $50,000 d. ($50,000) e. None of the above. The answer is