The Cook Corporation Has Two Divisions--East and West

question 268

Multiple Choice

The Cook Corporation has two divisions--East and West. The divisions have the following revenues and expenses: The management of Cook is considering the elimination of the West Division. If the West Division were eliminated, its traceable fixed costs could be avoided. Total common corporate costs would be unaffected by this decision. Given these data, the elimination of the West Division would result in an overall company net operating income (loss) of:

• A) $62,800
• B) $(125,900)
• C) $(186,700)
• D) $(123,900)

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Definitions:

Serum

The liquid part of blood that remains after blood has clotted, free of cells and clotting factors, but containing antibodies and other proteins.

Aspirin

A medication used to reduce pain, fever, inflammation, and, in low doses, to prevent blood clots by inhibiting the production of certain natural substances that cause fever, pain, swelling, and blood clots.

Prostaglandins

A group of physiologically active lipid compounds that have diverse hormone-like effects in animals.

Serotonin

A neurotransmitter involved in many functions, including mood regulation, digestion, and sleep.