Question
The Kelsh Company has two divisions--North and South. The divisions have the following revenues and expenses: North South Sales........................................................ $900,000 $800,000 Variable Expenses................................... 450,000 300,000
The Kelsh Company has two divisions--North and South. The divisions have the following revenues and expenses:
North South
Sales........................................................ $900,000 $800,000
Variable Expenses................................... 450,000 300,000
Traceable Fixed Expenses...................... 260,000 210,000
Allocated common corporate expenses.. 240,000 190,000
Net Operating Income (loss)................... ($50,000) $100,000
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. Given these data, the elimination of North Division would result in an overall company net operating income of what?
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