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The operations of Bridgeton Corporation are divided into the Adams Division and the Carter Division. Projections...

The operations of Bridgeton Corporation are divided into the Adams Division and the Carter Division. Projections for the next year are as follows:

Adams Division Carter Division Total
Sales $ 560,000 $ 336,000 $ 896,000
Variable costs 196,000 154,000 350,000
Contribution margin $ 364,000 $ 182,000 $ 546,000
Direct fixed costs 168,000 140,000 308,000
Segment margin $ 196,000 $ 42,000 $ 238,000
Allocated common costs 84,000 63,000 147,000
Operating income (loss) $ 112,000 $ (21,000 ) $ 91,000


Operating income for Bridgeton Corporation as a whole if the Carter Division were dropped would be:

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Answer #1

Operating income for Bridgeton Corporation as a whole if the Carter Division were dropped

= $112,000 – $63,000

= $49,000

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