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The Cook Corporation has two divisions--East and West. The divisions have the following revenues and expenses: East West Sales $ 560,000 $ 478,500 Variable costs

The Cook Corporation has two divisions--East and West. The divisions have the following revenues and expenses:

East West
Sales $ 560,000 $ 478,500
Variable costs 230,000 231,000
Traceable fixed costs 174,000 194,400
Allocated common corporate costs 121,500 175,100
Net operating income (loss) $ 34,500 $ (122,000)

The management of Cook is considering the elimination of the West Division. If the West 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 West Division would result in an overall company net operating income (loss) of:

Multiple Choice

$(87,500)

$(140,600)

$34,500

$(122,000)

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