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Carlton Corporation is composed of five divisions. Each division is allocated a share of Carlton's overhead to make divisional managers aware of the cost of
Carlton Corporation is composed of five divisions. Each division is allocated a share of Carlton's overhead to make divisional managers aware of the cost of running the corporate headquarters. The following information relates to the Metro Division:
Sales revenue | $ | 7,500,000 | |
Variable operating costs | 5,100,000 | ||
Traceable fixed operating costs | 1,900,000 | ||
Allocated corporate overhead | 300,000 | ||
If the Metro Division is closed, 100% of the traceable fixed operating costs can be eliminated. What will be the impact on Carltons overall profitability if the Metro Division is closed
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