Q1) Cameron Company has recorded information given below about results of its operations for first quarter:
| |
Total Company |
Southern Division |
Northern Division |
| Sales revenues |
$200,000 |
$ 80,000 |
$120,000 |
| Variable cost of sales |
$ 60,000 |
$ 30,000 |
$30,000 |
| Fixed costs: |
| Common |
$100,000 |
25,000 |
75,000 |
| Traceable |
$ 50,000 |
20,000 |
30,000 |
Which alternative would most probably improve company's financial performance, overall?
a) shut down Southern Division
b) shut down Northern Division
c) reduce common fixed costs
d) reduce traceable fixed costs