Solution-How much higher or lower vanikord total net

How much higher or lower vanikord total net operating income

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Reference no: EM133123544

Question - Vanikord Corporation currently has two divisions which had the following operating results for last year:

	Cork Division	Rubber Division
Sales	$500,000	$400,000
Variable costs	210,000	300,000
Contribution margin	290,000	100,000
Traceable fixed costs	130,000	70,000
Segment margin	160,000	30,000
Allocated common corporate fixed costs	90,000	50,000
Net operating income (loss)	$70,000	($20,000)

Because the Rubber Division sustained a loss, the president of Vanikord is considering the elimination of this division. All of the division's traceable fixed costs could be avoided if the division was dropped. None of the allocated common corporate fixed costs could be avoided. If the Rubber Division was dropped at the beginning of last year, how much higher or lower would Vanikord's total net operating income have been for the year?

Reference no: EM133123544

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How much higher or lower vanikord total net operating income

Reference no: EM133123544

Reference no: EM133123544

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