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Market Incorporated has two divisions, Talbot and Heather. The following is the income statement for...

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Accounting

Market Incorporated has two divisions, Talbot and Heather. The following is the income statement for the past month:

Talbot Heather Total
Sales revenue $ 348,600 $ 232,400 $ 581,000
Variable costs 290,900 58,100 349,000
Contribution or segment margin* $ 57,700 $ 174,300 $ 232,000
Common fixed costs (allocated) 129,840 86,560 216,400
Net operating income (loss) $ (72,140) $ 87,740 $ 15,600

*Note that there are no direct fixed costs.

What would Market's income (loss) be if the Talbot Division was dropped and all common fixed costs are unavoidable?

Multiple Choice

$72,140 loss

$42,100 loss

$87,740 profit

$232,000 profit

Answer & Explanation Solved by verified expert
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