The Operations of Ranger Corporation Are Divided into the Stargate

question 113

Multiple Choice

The operations of Ranger Corporation are divided into the Stargate Division and the Cosmos Division. Projections for the next year are as follows:
$\begin{array}{lrr}&\text { Stargate }&\text { Cosmos}\\&\text { Division }& \text { Division }& \text { Total }\\ \text {Sales } &\$500,000&\$360,000&\$860,000\\ \text {Less: Variable costs } &\underline{180,000}&\underline{200,000}&\underline{380,000}\\ \text { Contribution margin} &\$320,000&\$160,000&\$480,000\\ \text { Less: Direct fixed costs} &\underline{150,000}&\underline{125,000}&\underline{275,000}\\ \text {Segment margin } &\$170,000&\$35,000&\$205,000\\ \text {Less :Allocated common costs } &\underline{70,000}&\underline{55,000}&\underline{125,000}\\ \text { Operating income (loss) } &\underline{\$100,000}&\underline{\$(20,000) }&\underline{\$80,000}\end{array}$

Operating income for Ranger Corporation, as a whole, if the Cosmos Division were dropped would be

• A) $45,000.
• B) $80,000.
• C) $100,000.
• D) $120,000.

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Achievement Needs

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