Question
The Waller Company has two divisions--North and South. The divisions have the following revenues and expenses: North South Sales $ 900,000 $ 800,000 Variable expenses
The Waller 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 Waller 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, what would be the net operating income of the overall company if the North Division is eliminated? (Note: this is not asking for the increase or decrease, but rather the actual net income of the company after discontinuing the North.)
Do not enter dollar signs or commas. Enter any negative amounts (losses) with a leading minus (-) sign (e.g., enter a loss of $5,000 as -5000.)
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