The Waller Company has t wo divisions--North and South. The divisions have the f

Question

The Waller Company has t wo divisions--North and South. The divisions have the following revenues and expenses North South Sales Variable expenses Traceable fixed expenses $ 750,000 $ 650,000 215,000 189,000 200,000 $ (40,000) $ 46,000 325,000 225,000 240,000 located common corporate expenses Net operating income (loss) Management at Waller is pondering the elimination of North Division. If North Division were eliminated, its traceable fixed expenses could be avoided. The total common corporate expenses would be unaffected. Given these data, what would be the net operating income of the overall company if the North Division is eliminated? (Note: this is not asking for the increase or decrease, but rather the actual net income of the company after discontinuing the North.) Do not enter dollar signs or commas. Enter any negative amounts (losses) with a leading minus (-) sign (e.g., enter a loss of $5,000 as -5000.) Answer: Check

Explanation / Answer

Net operating income = 46000-240000= -194000

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