The gabriella division is? eliminated

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Reference no: EM131206432

The High School Musical Company has two divisions? - Troy and Gabriella. Troy has a segment margin of? $220,000. Gabriella has a segment margin of? $30,000. Common fixed costs total? $170,000. $50,000 of this amount is allocated to the Gabriella division. Management at High School is considering the elimination of the Gabriella Division since it has shown an operating loss for the past several years. Which of the following statements is correct if the Gabriella Division is? eliminated?

A. The? company’s operating income would increase by? $20,000.

B. The? company’s operating income would decrease by? $110,000.

C. ?Troy’s segment margin would decrease by? $50,000.

D. The? company’s common fixed costs would equal? $120,000.

E. The? company’s operating income would equal? $50,000

Reference no: EM131206432

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