Question
Henry Orbit has 2 divisions Neptune and Mars. The divisions have the following revenues and expenses: Neptune Mars Sales $450,000 $200,000 Variable costs 125,000 100,000
Henry Orbit has 2 divisions Neptune and Mars. The divisions have the following revenues and expenses:
|
| Neptune | Mars |
| Sales | $450,000 | $200,000 |
| Variable costs | 125,000 | 100,000 |
| Traceable fixed costs | 75,000 | 95,000 |
| Allocated common corporate costs | 45,000 | 20,000 |
| Net operating income (loss) | $205,000 | $(15,000) |
Orbit considering the elimination of the Mars Division since it has shown an operating loss for the past several years. If the Mars Division were eliminated, its traceable fixed costs could be avoided. Total common corporate costs would be unaffected by this decision. Given these data, the elimination of the Mars Division would result in an overall company net operating income of:
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Interne Revision In Verbundgruppen Und Franchise Systemen Verbreitung Und Qualit T Der Internen Revision In Unternehmensnetzwerken
Authors: Hans Ulrich Westhausen
1st. Aufl. 2016 Edition
3658121963, 978-3658121969
