Our company currently has two divisions, with the following budgeted operating results for next year:...
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Our company currently has two divisions, with the following budgeted operating results for next year: Division 1 Division 2 Sales $600,000 $300,000 Variable costs 310,000 200.000 $290,000 $100,000 Contribution margin Divisional fixed costs 110.000 60,000 Segment margin $180,000 $40,000 Allocated fixed costs 100.000 _50.000 Net income (loss) $ 80.000 3.010,000) Because of the expected loss in Division 2, we are considering eliminating it. All of the fixed costs for the division could be division was dropped. What is the expected effect on our company's consolidated income if we shut down Division 2? Our income would be: O A $10,000 higher OB. $40,000 lower OC. $50,000 higher OD. $100,000 lower
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