Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Vanikord Corporation currently has two divisions which had the following operating results for last year: Cork Division Rubber Division Sales $503,200 $393,600 Variable costs 210,960

Vanikord Corporation currently has two divisions which had the following operating results for last year:

Cork Division Rubber Division
Sales $503,200 $393,600
Variable costs 210,960 300,640
Contribution margin 292,240 92,960
Traceable fixed costs 136,400 63,600
Segment margin 155,840 29,360
Allocated common corporate fixed costs 91,600 53,200
Net operating income (loss) $64,240 ($23,840)

Because the Rubber Division sustained a loss, the president of Vanikoro is considering the elimination of this division. All of the division's traceable fixed costs could be avoided if the division was dropped. None of the allocated common corporate fixed costs could be avoided. If the Rubber Division was dropped at the beginning of last year, how much higher or lower would Vanikoro's total net operating income have been for the year?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting An Introduction to Concepts Methods and Uses

Authors: Michael W. Maher, Clyde P. Stickney, Roman L. Weil

10th Edition

1111822239, 324639767, 9781111822231, 978-0324639766

More Books

Students also viewed these Accounting questions

Question

=+1. What is a stakeholder? Define the term in your own words.

Answered: 1 week ago