The operations of Smithsonian Corporation are divided into the Manhattan Division and the Bronx Division. Projections for the next year are as follows: Operating income for Smithsonian Corporation as a whole if the Bronx Division were dropped would be
A) $40,000.
B) $22,500.
C) $50,000.
D) $60,000.

Question

The operations of Smithsonian Corporation are divided into the Manhattan Division and the Bronx Division. Projections for the next year are as follows:  Operating income for Smithsonian Corporation as a whole if the Bronx Division were dropped would be
A) $40,000. 
B) $22,500. 
C) $50,000. 
D) $60,000.

Quizplus · Accepted Answer

To find out the operating income for the corporation as a whole if the Bronx Division were dropped, we can subtract the operating income for the Bronx Division from the total operating income of both divisions.

Total operating income for both divisions = $70,000 + $30,000 = $100,000 
Operating income for the Manhattan Division = $70,000

Therefore, operating income for the corporation as a whole if the Bronx Division were dropped = $100,000 - $30,000 = $70,000

This means that the operating income would decrease by $22,500 ($70,000 - $47,500) if the Bronx Division were dropped, which is the correct answer.

The Operations of Smithsonian Corporation Are Divided into the Manhattan