Swanson Company Has 3 Divisions: X, Y, and Z

question 1

Multiple Choice

Swanson Company has 3 divisions: X, Y, and Z. Division X's income statement shows the following for the year ended December 31: Cost of goods sold is 75 percent variable and 25 percent fixed. Of the fixed costs, 60 percent are avoidable if the division is closed. All of the selling expenses relate to the division and would be eliminated if Division X were eliminated. Of the administrative expenses, 90 percent are applied from corporate costs. If Division X were eliminated, Swanson's income would

• A) increase by $150,000.
• B) decrease by $ 75,000.
• C) decrease by $155,000.
• D) decrease by $215,000.

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Definitions:

Household Duties

Tasks and responsibilities associated with managing and maintaining a home, such as cooking, cleaning, and taking care of family members.

Data Entry

The process of inputting data or information into a computer system or database for storage, processing, or analysis.

Foraging Society

A society that primarily subsists by hunting, fishing, and gathering wild food, rather than cultivating crops or domesticating animals.

Child Socialization

The process through which children learn the norms, values, behavior, and social skills appropriate to their society.