Question
The Kelsh Company has two divisions North and South. The divisions have the following revenues and expenses: North South Sales $700,000 $600,000 Less Operating Expenses:
The Kelsh Company has two divisions North and South. The divisions have the following revenues and expenses:
| North | South | ||||
| Sales | $700,000 | $600,000 | |||
| Less Operating Expenses: | |||||
| Variable Expenses | 350,000 | 250,000 | |||
| Traceable Fixed Expenses | 200,000 | 160,000 | |||
| Allocated Common Corporate Expenses | 180,000 | 730,000 | 120,000 | 530,000 | |
| Net Operating Income (Loss) | $( 30,000) | $ 70,000 | |||
Management at Kelsh is pondering the elimination of North Division. If North Division were eliminated, its traceable fixed expenses could be avoided. The total common corporate expenses would be unaffected. INSTRUCTIONS Compute the amount of total operating income that would result if Kelsh dropped the North Division. Match each of the following with the correct amount:
| A. | $700,000 |
| B. | $1,300,000 |
| C. | $300,000 |
| D. | $350,000 |
| E. | No |
| F. | $250,000 |
| G. | $600,000 |
| H. | $360,000 |
| I. | ($110,000) |
| J. | $160,000 |
| K. | $300,000 |
| L. | $600,000 |
| M. | $40,000 |
|
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Management Planning Guide For Information Systems Security Auditing
Authors: National State Auditors Association And The U. S. General Accounting Office
1st Edition
1508456720, 978-1508456728
