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Larry Inc. has two divisions, A and B. The income statement of the previous year is as follows: A B Total Sales $ 560,200 $
Larry Inc. has two divisions, A and B. The income statement of the previous year is as follows:
A | B | Total | ||||||||
Sales | $ | 560,200 | $ | 336,300 | $ | 896,500 | ||||
Variable Costs | 176,300 | 174,200 | 350,500 | |||||||
Contribution Margin | 383,900 | 162,100 | 546,000 | |||||||
Fixed Costs (allocated) | 284,575 | 170,925 | 455,500 | |||||||
Operating Income | $ | 99,325 | $ | (8,825 | ) | $ | 90,500 | |||
Assuming fixed costs are unavoidable, how much would Larrys operating income be if Division B was dropped?
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$383,900 profit
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$71,600 loss
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$90,500 profit
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$99,325 profit
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