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The operations of Winston Corporation are divided into the Blink Division and the Blur Division. Projections for the next year are as follows: Sales
The operations of Winston Corporation are divided into the Blink Division and the Blur Division. Projections for the next year are as follows: Sales Variable costs Blink Division $ 345,000 111,000 Blur Division $ 191,000 Total $ 536,000 90,000 201,000 Contribution margin $ 234,000 $ 101,000 $ 335,000 Direct fixed costs 97,000 83,000 180,000 Segment margin $ 137,000 $ 18,000 $ 155,000 Indirect Fixed 52,000 44,500 96,500 Operating income (loss) $ 85,000 $ (26,500) $ 58,500 If the Blur Division were dropped, Blink Division's sales would increase by 40%. If this happened, the operating income for Winston Corporation, as a whole, would be: A) $119,000. B) $85,000. C) $134,100. D) $81,900.
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