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Dalton Company follows a policy of allocating all common costs equally among its profit centers. A partial responsibility income statement for a typical month is
Dalton Company follows a policy of allocating all common costs equally among its profit centers. A partial responsibility income statement for a typical month is shown below: Dalton Company Profit Center 1 Profit Center 2 Profit Center 3 Responsibility margins $ 200,000 $ 80,000 $ 70,000 $ 50,000 Common fixed costs $ 165,000 $ 55,000 $ 55,000 $ 55,000 Income from operations $ 35,000 $ 25,000 $ 15,000 $ (5,000) After evaluating these data, Dalton Company decides to close Profit Center 3. This action
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