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help me solve 2 multiple choice thanks Vanik Corporation currently has two divisions which had the following operating results for last year: Cork Division Rubber
help me solve 2 multiple choice thanks
Vanik Corporation currently has two divisions which had the following operating results for last year: Cork Division Rubber Division Sales $600,000 $350,000 Variable costs 250,000 220,000 Contribution margin 350,000 130,000 Traceable fixed costs 110,000 160,000 190,000 Segment Margin 20,000 Allocated common corporate fixed costs 80,000 45,000 Net operating income (loss) $110,000 ($25,000) Because the Rubber Division sustained a loss, the president of Vanik is considering the elimination of this division. All of the division's traceable fixed costs could be avoided if the division was dropped. None of the allocated common corporate fixed costs could be avoided. If the Rubber Division was dropped at the beginning of last year, the financial advantage (disadvantage) to the company for the year would have been: $25,000 ($25,000) ($20,000) $20,000 CoolAir Corporation manufactures portable window air conditioners. CoolAir has the capacity to manufacture and sell 80,000 air conditioners each year but is currently only manufacturing and selling 60,000. The following per unit numbers relate to annual operations at 60,000 units: Per Unit $125 Selling Price Manufacturing costs: Variable $25 $40 Fixed Selling and administrative costs: Variable $10 Fixed $15 The City of Clearwater would like to purchase 3,000 air conditioners from CoolAir but only if they can get them for $75 each. Variable selling and administrative costs on this special order will drop down to $2 per unit. This special order will not affect the 60,000 regular sales and it will not affect the total fixed costs. The annual financial advantage (disadvantage) for the company as a result of accepting this special order from the City of Clearwater should be: $144,000 $24,000 ($21,000) ($129,000) Step by Step Solution
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