Question

3. The Kelsh Company has two divisions--North and South. The divisions have the following revenues and expenses: Sales Variable expenses Traceable fixed expenses Allocated common corporate expenses Net operating income (loss) North $900,000 450,000 260,000 240,000 ($50.000 South $800,000 300,000 210,000 190.000 $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, you will advise:
A) To eliminate North division, as the company profitability will immediately improve by $50.000
B) To eliminate North division, as the company profitability will improve by $260,000.
C) To keep North division, as its elimination will turn the company from profitable to unprofitable.
D) To keep North division, as its elimination will be too complicated and will bring just a little improvement in company's profitability. ​

Answer 1

Answer:

My guess is a

IM NOT SURE...:P

Explanation: