Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. the kelsh company has two divisions--north and sou

The Kelsh Company has two divisions--North and South. The divisions have the following revenues and...

70.2K

Verified Solution

Question

Accounting

image
The Kelsh Company has two divisions--North and South. The divisions have the following revenues and expenses: Sales Variable expenses Traceable fixed expenses Allocated common corporate expenses Net operating income (loss) North South $900,000 $800,000 450,000 300,000 260,000 210,000 240.000 190.000 ($50.000) $100,000 Management at Kelsh is pondering the elimination of the North Division. If the North Division were eliminated, its traceable fixed expenses could be avoided. The total common corporate expenses would be unaffected. Given this data, you will advise: To eliminate North division, as the company profitability will immediately improve by $50,000. To eliminate North division, as the company profitability will improve by $260,000. To keep North division, as its elimination will turn the company from profitable to unprontable. To keep North division, as its elimination will be too complicated and will bring just a little improvement in company's profitability

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students