The Following Information Relates to Next Year's Projected Operating Results

question 107

Multiple Choice

The following information relates to next year's projected operating results of the Children's Division of Grunge Clothing Corporation:


If the Children's Division is eliminated, $170,000 of the above fixed expenses could be avoided.The annual financial advantage (disadvantage) for the company of eliminating this division should be:

• A)($300,000)
• B)$30,000
• C)($30,000)
• D)$300,000

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Definitions:

Northwest-Corner Rule

A procedure in the transportation model where one starts at the upper-left-hand cell of a table (the northwest corner) and systematically allocates units to shipping routes.

Feasible Solution

A potential solution to a problem that meets all the constraints and requirements specified in the problem's definition.

Improvement Indices

Metrics or measures used to quantify the level of improvement or progress in various aspects such as productivity, quality, or efficiency within an organization or system.