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Walsh Corporation currently has two divisions which had the following operating results for last year yet wered Rubber Cork Division Division nts out of 2
Walsh Corporation currently has two divisions which had the following operating results for last year yet wered Rubber Cork Division Division nts out of 2 Flag estion $ 600,000 350,000 Sales Variable costs Contribution margin Traceable fixed costs Segment margin 250,000 350,000 130,000 160,000 110,000 190,000 20,000 80,000 220,000 Al 45,000 located common corporate fixed costs Net operating income (loss) $110,000 (25,0p0 Because the Rubber Division sustained a loss, the president of Walsh 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, the financial advantage (disadvantage) to the company for the year would have been: Select one a. ($25,000) O b. $25,000 . ($20,000) O d. $20,000
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