Question

He Cook Corporation has two divisions--East and West. The divisions have the following revenues and expenses:

Answer 1

Answer:

The elimination of the West Division would result in an overall company net operating loss of -$42,300

Explanation:

In order to calculate what would of the net operating income of the company is of the management of cook consider to eliminate the west division, we would have to make the following calculation:

Net income if Discontinue=Sales-variable cost-Trecable fixed expense- Allocated common corporate cost

                                          =$ 585,000- $174,000-$145,500-$307,800

                                          =-$42,300

The elimination of the West Division would result in an overall company net operating loss of -$42,300