The Wall-shire Company hasthree divisionsâNorthern, Western, and Southern. The divisions havethe following revenues and expenses: Northernn WesternSouthern
Sales $450,000 $410,000 680,000
Variable expenses 225,000 140,000 242,000
Traceable fixed expenses 165,000 105,000218,000
Allocated common corporate expenses 92,000 _ 85,000135,000
Net operating income (loss) $(32,000) $ 80,000 $85,000
Management of Kosco is considering the elimination of theNorthern Division. If the Northern Division were eliminated, itstraceable fixed expenses could be avoided. The total commoncorporate expenses would be unaffected. Given these data,what is your decision, eliminating or keeping it andwhy? Justify your decision, showing yourcalculation, and overall companyâs netoperating income or loss, beforeand after eliminating Northern Division(3points)
The Wall-shire Company hasthree divisionsâNorthern, Western, and Southern. The divisions havethe following revenues and expenses: Northernn WesternSouthern
Sales $450,000 $410,000 680,000
Variable expenses 225,000 140,000 242,000
Traceable fixed expenses 165,000 105,000218,000
Allocated common corporate expenses 92,000 _ 85,000135,000
Net operating income (loss) $(32,000) $ 80,000 $85,000
Management of Kosco is considering the elimination of theNorthern Division. If the Northern Division were eliminated, itstraceable fixed expenses could be avoided. The total commoncorporate expenses would be unaffected. Given these data,what is your decision, eliminating or keeping it andwhy? Justify your decision, showing yourcalculation, and overall companyâs netoperating income or loss, beforeand after eliminating Northern Division(3points)
