Answer:
c. $30,000 lower
Explanation:
Missing word <em>"Rice Corporation currently operates two divisions which had operating results last year as follows:
</em>
<em>West Division Troy Division
</em>
<em>Sales $600,000 $300,000
</em>
<em>Variable costs 310,000 200,000
</em>
<em>Contribution margin 290,000 100,000
</em>
<em>Traceable fixed costs 110,000 70,000
</em>
<em>Allocated common corporate costs 90,000 45,000
</em>
<em>Net operating income (loss) $ 90,000 ($15,000)</em>
<em>Options are: a. $15,000 higher, b. $45,000 lower, c. $30,000 lower, d. $60,000 higher"</em>
Particulars Amount
Contribution margin $100,000
Less: Traceable fixed costs <u>$70,000</u>
Segment margin of Troy Division <u>$30,000</u>
The operating income would been $30,000 less without the segment margin contributed by the Troy Division. Hence, If the Troy Division had been eliminated at the beginning of last year, Rice Corporation's operating income for last year would have been $30,000 lower.
