The Operations of Smits Ltd Operating Income for Smits Ltd

question 25

Multiple Choice

The operations of Smits Ltd. are divided into the Childs Division and the Jackson Division. Projections for the next year are as follows: $\begin{array} { llll} &\text { Childs } & \text { Jackson } & \\&\text { Division } & \text { Division } & \text { Total }\\\hline \text {Sales}&£ 250,000 & £ 180,000&£ 430,000\\\text {Variable costs}&90,000 & 100,000 & 190,000\\\text {Contributi on margin}&£ 160,000 & £ 80,000 & £ 240,000\\\text {Direct fixed costs}&75,000&62,500&137,500\\\text {Segment margin}&£ 85,000&£ 17,500 &£ 102,500\\\text {Allocated common costs}&35,000 & 27,500 & 62,500\\\text {Operating income (loss) }&£ 50,000 &£(10,000) &£ 40,000\\\end{array}$ Operating income for Smits Ltd. as a whole if the Jackson Division were dropped would be

• A)£22,500.
• B)£40,000.
• C)£50,000.
• D)£60,000.

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Definitions:

Affinity

The degree to which a substance tends to combine with another, often used in the context of biochemical reactions.

Hematocrit

The proportion of blood volume that is occupied by red blood cells, a key measure of blood health.

RBCs

Short for Red Blood Cells, they are cells in the blood that carry oxygen from the lungs to the body's tissues and carbon dioxide back to the lungs.

Hemoglobin

A red protein responsible for transporting oxygen in the blood of vertebrates.