213k views
1 vote
The operations of Smits Corporation are divided into the Child Division and the Jackson Division. Projections for the next year are as follows: Child Division Jackson Division Total Sales revenue $250,000 $180,000 $430,000 Variable expenses 90,000 100,000 190,000 Contribution margin $160,000 $80,000 $240,000 Direct fixed expenses 75,000 62,500 137,500 Segment margin $85,000 $17,500 $102,500 Allocated common costs 35,000 27,500 62,500 Total relevant benefit (loss) $50,000 $(10,000) $40,000 Operating income for Smits Corporation as a whole if the Jackson Division were dropped would be:

User Bekki
by
9.0k points

1 Answer

5 votes

Answer:

$22,500

Step-by-step explanation:

$85,000 − $62,500 = $22,500

User Qwertyfshag
by
7.8k points