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Should rainbow close the riding toy division

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Question - After receiving financial information about the riding toy division at Rainbow Toys, management is considering closing the riding toy division. The division generated revenues of $950,500, the contribution margin was $239,800, and division income was ($162,700). However management discovered that $395,200 of corporate fixed overhead has been allocated to the division and included in the computation of division income. With this additional information, should Rainbow close the riding toy division? Why or why not?

Reference no: EM133161768

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