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Evaluate the tamworth division as an investment

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Reference no: EM132550703

The following information was taken from the business unit profit and loss statement of Resell Real Estate Agents for 2019:

Resell                                         Real Estate               Sydney Division           Tamworth Division          North Division

Revenues                              $750 000                      $200 000                   $225 000                    $325,000

Variable operating expenses       $410 000                   $110 000                       $120,000                  $180,000

Fixed expenses controllable by

division manager                           $210,000                     $65,000                     $75,000                      $70,000

Fixed expenses traceable to the division

but controllable by others.              $65,000                         $15,000                        $25,000                    $25,000

Question 1: In addition, the company incurred common fixed costs of $18 000. Which amount should be used to evaluate the Tamworth Division as an investment of the company?

Select one:

a. $5,000

b. $12,000

c. $105,000

d. $30,000

Reference no: EM132550703

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