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

East West

Sales $ 500,000 $550,000

Variable costs 200,000 275,000

Traceable fixed costs 150,000 180,000

Allocated common corporate costs 135,000 170,000

Net operating income (loss) $ 15,000 $ (75,000)

Cook's management 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.

a. Required. Given these data, the elimination of the West Division would result in an overall company net operating income or (loss) of how much?

b. Required. Prepare memo to Cook's management indicating and explaining your recommendation regarding the elimination of the West Division.