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The operations of Knickers Corporation are divided into the Pacers Division and the Bulls Division. Projections for the next year are as Pacersvision$672,000 pivision$252,000262.500 Variable expenses $409,500 Direct fxed expenses Segment margin Allocated common costs $273,000 12S000 $147,000 63,000 $31,500、929 110.250 Operating income for Knickers Corporation as a whole if the Bulls Division were dropped would be Oa. $99,75o. Ob. $36,75o Ос. $84,000. Previous Next
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Answer #1

Operating income for Knickers corporation as a whole if the Bulls Division were Dropped would be

If Bulls Division is dropped, then total segment margin would be $147,000 (only pacers company).

And total common cost would be $110,250 (both divisions)

Operating income = Segment margin - Total cost

= $147,000 - $110,250

= $36,750

Option B. Is correct.

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