Ask Question
19 July, 19:58

Product (Segment) elimination decision. The Kelsh Company has two divisions--North and South. The divisions have the following revenues and expenses: North South Sales $900,000 $800,000 Variable expenses 450,000 300,000 Traceable fixed expenses 260,000 210,000 Allocated common corporate expenses 240,000 190,000 Net operating income (loss) ($50,000) $100,000 Management at Kelsh is pondering the elimination of the North Division. If the North Division were eliminated, its traceable fixed expenses could be avoided. The total common corporate expenses would be unaffected. Given this data, the elimination of the North Division would result in an overall company operating income of:

+1
Answers (1)
  1. 19 July, 23:48
    0
    Net operating income (loss) $ (140,000)

    Explanation:

    The Kelsh Company

    North South

    Sales $900,000 $800,000

    Variable expenses 450,000 300,000

    Traceable fixed expenses 260,000 210,000

    Allocated common corporate expenses 240,000 190,000

    Net operating income (loss) ($50,000) $100,000

    Given this data, the elimination of the North Division would result in an overall company operating income of:$ (140,000)

    As the total common corporate expenses would be unaffected there fore they would be added in the income statement of the South Division alone.

    The Kelsh Company

    South

    Sales $800,000

    Variable expenses 300,000

    Traceable fixed expenses 210,000

    Allocated common corporate expenses 240,000

    190,000

    Net operating income (loss) $ (140,000)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Product (Segment) elimination decision. The Kelsh Company has two divisions--North and South. The divisions have the following revenues and ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers