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Wildhorse, Inc. operates three divisions, Weak, Average, and Strong. As it turns out, the Weak division has the lowest operating income, and the president wants
Wildhorse, Inc. operates three divisions, Weak, Average, and Strong. As it turns out, the Weak division has the lowest operating income, and the president wants to close it. Survival of the fittest, I say!" was his response when the Weak division's manager, insisted Kevin, that his division earned money for the company. Following is the most recent financial analysis for each division: Weak Average Strong Sales revenue $125,900 $455,500 $527,200 Variable expenses 54,200 247,100 305,000 Contribution margin 71,700 208,400 222,200 Direct expenses 30,100 77,000 110,200 Allocated expenses 71,200 71,200 71,200 Operating income $(29,600) $60,200 $40,800 (b) By how much would total income change if the Weak division were dropped? Total income will by $ e Textbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (c) Based on the way allocated expenses are divided among the divisions, what do you think will happen to the Average division if the company continues to prepare financial statements in this way, assuming Weak was dropped? If Weak is dropped, then Average will report allocated expenses of $ , resulting in an
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