Simpson Corporation Operates Two Divisions with the Following Operating Results

question 123

Multiple Choice

Simpson Corporation operates two divisions with the following operating results from last year: Management is considering whether the Eastern Division should be discontinued since it incurred an operating loss last year. Allocated common fixed costs would continue for Simpson Corporation whether the division is discontinued or not.
If the Eastern Division had been discontinued at the beginning of last year, what would the total operating income for Simpson Corporation have been for the year?

• A)$55,000
• B)$20,000
• C)$25,000
• D)$110,000

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