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Fis-Kla Corporation is composed of 3 divisions. Each division is allocated a share of the overhead of Fis-Kla to make divisional managers aware of the
Fis-Kla Corporation is composed of 3 divisions. Each division is allocated a share of the overhead of Fis-Kla to make divisional managers aware of the cost of running the corporate headquarters. The following information relates to the Metro Division $7,200,000 Sales Variable Operating Costs $5,220,000 Traceable Fixed Operating Costs $2,710,000 Allocated Corporate Overhead $250,000 If the Metro DNvision is closed, 100% of the traceable fxed operating costs can be eliminated. What will be the impact on the overal profitability of Fis-Kia if the Metro Division Is closed? Select one A Increase by $730,000 8 Increase by $480,000 C Decrease by $1,730,000 D. Decrease by $1.980,000 E. Increase by $980,000
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