Mason Transport has four divisions. A recent income statement for its West division follows: ...
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Accounting
Mason Transport has four divisions. A recent income statement for its West division follows:
Revenue 250,000
Salaries for drivers (175,000)
fuel expenses ( 25,000)
Insurance for division facility ( 35,000)
Division-level facility sustaining costs (20,000)
Company-wide facility sustaining costs (65,000)
Should the company eliminate the West division?
Which are the relevant costs to the decision?
What if West is able to increase revenue to $270,000 by raising prices?
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