Question: The operations of Hart Corporation Ltd are divided into the Will Division and the Aloy Division. Projections for the next year are as follows:
|
|
Will Division
|
Aloy Division
|
Total
|
|
Sales
|
$560,000
|
$336,000
|
$896,000
|
|
Less: Variable costs
|
196,000
|
154,000
|
350,000
|
|
Contribution margin
|
$364,000
|
$182,000
|
$546,000
|
|
Less: Direct fixed costs
|
1,680,000
|
140,000
|
308,000
|
|
Segment margin
|
$196,000
|
$42,000
|
$238,000
|
|
Less: Allocated common cost
|
84,000
|
63,000
|
147,000
|
|
Operating income (loss)
|
$112,000
|
($21,000)
|
$91,000
|
Compute the Operating income for Hart Corporation, as a whole, if the Aloy Division were dropped?
a. $133,000
b. $112,000
c. $91,000.
d. $49,000.
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