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Required information [The following information applies to the questions displayed below.] ACME Food Manufacturing reports the following for two of its divisions for a recent
Required information [The following information applies to the questions displayed below.] ACME Food Manufacturing reports the following for two of its divisions for a recent year. Assume that each of the company's divisions has a required rate of return of 6%. Compute residual income for each division. (Enter your answers in millions.) Lafayette Corp, is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $9,000, The division sales for the year were $1,056,000 and the variable costs were $866,000. The fixed costs of the division were $199,000. If the mountain bike division is dropped, 30% of the fored costs allocated to that division could be eliminated, The impact on operating income for eliminating this business segment would be: Muliple Choice 559700 decrease $130.300 decrease \$190000 increase $50,700 docrease $190000 decreate
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