Summers Corporation Is Composed of Five Divisions

question 73

Multiple Choice

Summers Corporation is composed of five divisions.Each division is allocated a share of Summers's overhead to make divisional managers aware of the cost of running the corporate headquarters.The following information relates to the Metro Division:
If the Metro Division is closed,100% of the traceable fixed operating costs can be eliminated.What will be the impact on Summers's overall profitability if the Metro Division is closed?

• A)Decrease by $200,000.
• B)Decrease by $500,000.
• C)Decrease by $2,100,000.
• D)Decrease by $2,400,000.
• E)None of thesE.

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Definitions:

Meditative

Pertaining to or involving meditation, a practice of focused attention to achieve a mentally clear and emotionally calm state.

Structural Configuration

The arrangement of roles, responsibilities, and relationships within an organization, determining how it is organized and how it functions.

Simple Organization Design

An organizational structure characterized by low complexity, few hierarchical levels, and wide spans of control.

Dominant Technologies

The leading technologies in a particular field or industry that have widespread adoption and set the standard for operations and products.