Adams Transport Company divides its operations into four divisions. A recent income statement for its West Division

follows.

Required

a$.$ By how much would companywide income increase or decrease if West Division is eliminated? Should West

Division be eliminated?

b$.$ Assume that West Division is able to increase its revenue to $$550,000$ by raising its prices. Determine the amount

of the contribution to profit by West Division. Should West Division be eliminated if revenue is $$550,000?$

c$.$ What is the minimum amount of revenue required to justify continuing the operation of West Division?

Complete this question by entering your answers in the tabs below.

Required $A$

By how much would companywide income increase or decrease if West Division is eliminated? Should West Division be

eliminated?

Income would

by

Should West Division be eliminated?Adams Transport Company divides its operations into four divisions. A recent income statement for its West Division follows.

ADAMS TRANSPORT COMPANY

West Division

Income Statement for Year $3$

Revenue $ $510,000$

Salaries for drivers $(360,000)$

Fuel expenses $(51,000)$

Insurance $(71,000)$

Division$-$level facility$-$sustaining costs $(41,000)$

Companywide facility$-$sustaining costs $(131,000)$

Net loss $ $(144,000)$

Required

By how much would companywide income increase or decrease if West Division is eliminated? Should West Division be eliminated?

Assume that West Division is able to increase its revenue to $$550,000$ by raising its prices. Determine the amount of the contribution to profit by West Division. Should West Division be eliminated if revenue is $$550,000?$

What is the minimum amount of revenue required to justify continuing the operation of West Division?