Business, 21.03.2020 00:29 mariahisawsome1
Simpson Corporation operates two divisions with the following operating results from last year:
Western Division Eastern Division Total
Sales $620,000 $290,000 $910,000
Variable costs $310.000 200,000 $510,000
Contribution margin $310,000 $90,000 $400,000
Avoidable fixed costs $110,000 50,000 $160,000
Allocated common fixxed costs $90,000 $45,000 $135,000
Operating income (loss) $110,000 $5,000 $105,000
Management is considering whether the Eastern Division should be discontinued since it incurred an operating loss last year. Allocated common fixed costs would continue for Simpson Corporation whether the division is discontinued or not If the Eastern Division had been discontinued at the beginning of last year, what would the total operating income for Simpson Corporation have been for the year?
A. $5,000
B. $40,000
C. $110,000
D. $65,000
Answers: 2
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Simpson Corporation operates two divisions with the following operating results from last year:
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