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The following partial income statements are for the Southeast and Northwest Divisions of US Games. These two divisions operate in the same industry but in

The following partial income statements are for the Southeast and Northwest Divisions of US Games. These two divisions operate in the same industry but in different geographical markets.

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Southeast Northwest Sales $3,000,000 $3,000,000 Variable CGS (2,400,000) (1,000,000) Variable selling costs (250,000) (250,000) Avoidable direct fixed costs (400,000) (900,000) Unavoidable direct fixed costs (100,000) (1,000,000) Allocated fixed costs (300,000) (300,000) Operating income $ (450,000) $ (450,000)

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