The operations of Superior Corporation are divided into the Northrup Division an

Question

The operations of Superior Corporation are divided into the Northrup Division and the Hawley Division. Projections for the next year are as follows:

Northrup

Division

Hawley

Division

Operating income for Superior Corporation, as a whole, if the Hawley Division were dropped would be

A. $151,500

B. $52,000

C. $128,000

D. $104,500

Northrup

Division

Hawley

Division

Total Sales $570,000 $430,000 $1,000,000 Less Variable costs 197,500 235,000 432,500 Contribution margin $372,500 $195,000 $567,500 Less Direct fixed costs 160,500 142,500 303,000 Segment margin $212,000 $52,500 $264,500 Less Allocated common costs 84,000 76,000 160,000 Operating Income (loss) $128,000 $(23,500) $104,500

Explanation / Answer

Answer : Answer 'B' is correct i.e. $ 52000.

If Hawley division Dropped, Net operating Income will be

Operating Income from Northrup Division 128000

Less : Allocated common cost of Hawley division 76000

---------------------

  Net operating Income 52000

----------------------------------

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.