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The Kelsh Company has two divisions-North and south. the divisions have the following revenues and expenses: Management at Kelsh is traceable fixed could be the
The Kelsh Company has two divisions-North and south. the divisions have the following revenues and expenses: Management at Kelsh is traceable fixed could be the elimination of North Division. North Division were eliminated, its these data, the elimination avoided. the total on expenses would be unaffected. Given of North Division would result an overall company net operating income of in $100,000 $150,000 $(140,000) $50,000 Peluso's Company, a manufacturer of snowmobiles, is operating at 70% of capacity. Peluso's plant manager is considering making the headlights now being purchased from an outside for Peluso plant equipment that could be used to manufacture the the design engineer estimates that each headlight requires $4 of direct materials, $3 of direct labor, and $6.00 manufacturing overhead. Forty percent of the manufacturing overhead is a fixed cost that would be unaffected by this decision. A decision by Peluso Company to manufacture the headlights should result in a net gain (loss) for each headlight of $(2.00) $1.60 $0.40 $2.80
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