Vanikoro Corporation currently has two divisions which had the following operating results for last year: Since the Rubber Division sustained a loss,the president of Vanikoro is considering the elimination of this division.All of the fixed costs for the division could be eliminated if the division was dropped.If the Rubber Division was dropped at the beginning of last year,how much higher or lower would Vanikoro's total net operating income have been for the year?
A)$10,000 higher
B)$40,000 lower
C)$50,000 higher
D)$100,000 lower

Question

Vanikoro Corporation currently has two divisions which had the following operating results for last year:  Since the Rubber Division sustained a loss,the president of Vanikoro is considering the elimination of this division.All of the fixed costs for the division could be eliminated if the division was dropped.If the Rubber Division was dropped at the beginning of last year,how much higher or lower would Vanikoro's total net operating income have been for the year?
A)$10,000 higher 
B)$40,000 lower 
C)$50,000 higher 
D)$100,000 lower

Quizplus · Accepted Answer

The segment margin of the Rubber Division represents the amount by which the company's overall net income would drop if the Rubber Division were to be droppe

Vanikoro Corporation Currently Has Two Divisions Which Had the Following