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The Cook Corporation has two divisions--East and West. The divisions have the following revenues and expenses:
The Cook Corporation has two divisions--East and West. The divisions have the following revenues and expenses:
EastWestSales$560,000 $478,500 Variable costs 192,000 247,500 Traceable fixed costs 153,000 162,000 Allocated common corporate costs 141,800 164,900 Net operating income (loss)$73,200 $(95,900)
The management of Cook is considering the elimination of the West Division. If the West Division were eliminated, its traceable fixed costs could be avoided. Total common corporate costs would be unaffected by this decision. Given these data, the elimination of the West Division would result in an overall company net operating income (loss) of:
