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Question 11 (2.5 points) Vanikoro Corporation currently has two divisions which had the following operating results for last year: Cork Division Rubber Division Sales $500,000
Question 11 (2.5 points) Vanikoro Corporation currently has two divisions which had the following operating results for last year: Cork Division Rubber Division Sales $500,000 $400,000 Variable costs 210.000 300.000 Contribution margin 290,000 100,000 Traceable fixed costs 130.000 70.000 Segment margin 160,000 30,000 Allocated common fixed 90.000 50.000 costs Net operating income $70.000 ($20,000) Vanikoro is considering the elimination of the Rubber Division. All of the division's traceable fixed costs could be avoided if the division was dropped. None of the allocated common fixed costs could be avoided. the Rubber Division is dropped, Vanikoro's net operating income will: O increase by $20,000 decrease by $30,000 decrease by $50,000 increase by $50,000
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