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Ahlia Company's management wants to determine if Division Y should be eliminated. The following data are available in thousands). Segmented Income Statement Division X Division
Ahlia Company's management wants to determine if Division Y should be eliminated. The following data are available in thousands). Segmented Income Statement Division X Division Y Division Z Total Sales $200 $300 $400 $900 Less variable costs 80 150 160 390 Contribution margin $120 $150 $240 $510 Less direct fixed costs 70 170 120 360 Segment margin $ 50 ($ 20) $120 $150 Less common fixed costs 90 Operating income $ 60 Assuming all direct fixed costs of Division Y are avoidable, what would be the change in operating income if Division Y were eliminated
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