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The Operations of Bridgeton Corporation Are Divided into the Adams

Question 49

Multiple Choice

The operations of Bridgeton Corporation are divided into the Adams Division and the Carter Division. Projections for the next year are as follows:
 Adams  Division  CarterDivision  Total Sales $560,000$336,000$896,000 Variable costs 196,000154,000350,000 Contribution margin$364,000$182,000$546,000 Direct fixed costs168,000140,000308,000Segment margin $196,000$42,000$238,000Allocated common costs 84,00063,000147,000 Operating income (loss) $112,000$(21,000) $91,000\begin{array}{lrr}&\text { Adams }\\&\text { Division }& \text { CarterDivision }& \text { Total }\\ \text {Sales } &\$560,000&\$336,000&\$896,000\\ \text { Variable costs } &\underline{196,000}&\underline{154,000}&\underline{350,000}\\ \text { Contribution margin} &\$364,000&\$182,000&\$546,000\\ \text { Direct fixed costs} &\underline{168,000}&\underline{140,000}&\underline{308,000}\\ \text {Segment margin } &\$196,000&\$42,000&\$238,000\\ \text {Allocated common costs } &\underline{84,000}&\underline{63,000}&\underline{147,000}\\ \text { Operating income (loss) } &\underline{\$112,000}&\underline{\$(21,000) }&\underline{\$91,000}\end{array}

Operating income for Bridgeton Corporation as a whole if the Carter Division were dropped would be:


A) $133,000.
B) $112,000.
C) $91,000.
D) $49,000.

Correct Answer:

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