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Munoz Transport Company divides its operations into four divisions. A recent income statement for...

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Accounting

Munoz Transport Company divides its operations into four divisions. A recent income
statement for its West Division follows.
MUNOZ TRANSPORT COMPANY
West Division
Income Statement for Year 3
Revenue
Salaries for drivers
Fuel expenses
Insurance
Division-level facility-sustaining costs
Companywide facility-sustaining costs
Net loss
Required
a. By how much would companywide income increase or decrease if West Division is
eliminated? Should West Division be eliminated?
b. Assume that West Division is able to increase its revenue to $670,000 by raising its prices.
Determine the amount of the contribution to profit by West Division. Should West Division
be eliminated if revenue is $670,000?
c. What is the minimum amount of revenue required to justify continuing the operation of
West Division?
Complete this question by entering your answers in the tabs below.
Assume that West Division is able to increase its revenue to $670,000 by raising its prices. Determine
contribution to profit by West Division. Should West Division be eliminated if revenue is $670,000?
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