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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: Blink Division
The operations of Winston Corporation are divided into the Blink Division and the Blur Division. Projections for the next year are as follows:
Blink Division | Blur Division | Total | |||||||||
Sales | $ | 310,000 | $ | 180,000 | $ | 490,000 | |||||
Variable costs | 104,000 | 83,000 | 187,000 | ||||||||
Contribution margin | $ | 206,000 | $ | 97,000 | $ | 303,000 | |||||
Direct fixed costs | 90,000 | 76,000 | 166,000 | ||||||||
Segment margin | $ | 116,000 | $ | 21,000 | $ | 137,000 | |||||
Allocated common costs | 45,000 | 37,500 | 82,500 | ||||||||
Operating income (loss) | $ | 71,000 | $ | (16,500 | ) | $ | 54,500 | ||||
If the Blur Division were dropped, Blink Division's sales would increase by 35%. If this happened, the operating income for Winston Corporation, as a whole, would be:
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