Shut-down decision, net operating income
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Company A has 2 divisions - north and south and their data is as follows:
North South
Sales 900,000 800,000
Variable expenses 450,000 300,000
Traceable Fixed Expenses 260,000 210,000
Allocated common expenses 240,000 190,000
Net operating income (loss) (50,000) 100,000
Should management shut down the north division?
Calculate the net operating income if the north division is eliminated.
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Solution Summary
The solution determines whether the management should shut down the north division, and calculates the net operating income if the north division is eliminated.
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Should management shut down the north division?
North
Sales 900,000
Variable expenses 450,000
Traceable Fixed ...
Purchase this Solution
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