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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Definitions:

Worker Empowerment

The process of giving employees authority, resources, and skills to make decisions and contribute to the organization's success independently.

Entrusting Work

Delegating tasks or responsibilities to another individual or team, often with a level of confidence in their capabilities.

Delegation

The process of distributing and entrusting work to others.

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