Cook Company Has Two Divisions-Eastern and Western

question 123

Multiple Choice

Cook Company has two divisions-Eastern and Western.The divisions have the following revenues and expenses: The management of Cook is considering the elimination of the Eastern Division.If the Eastern Division were eliminated,the direct fixed costs associated with this division could be avoided.However,corporate costs would still be $305,000 in total.Given these data,the elimination of the Eastern Division would result in an overall company net income (loss) of:

• A) $15,000.
• B) ($60,000).
• C) ($75,000).
• D) ($155,000).

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