The Operations of Knickers Corporation Are Divided into the Pacers

question 96

Multiple Choice

The operations of Knickers Corporation are divided into the Pacers Division and the Bulls Division.Projections for the next year are as follows: $\begin{array}{lccc}&\text { Pacers } & \text { Bulls } & \\&\text { Division } & \text { Division } & \text { Total }\\\text { Sales } & \$ 420,000 & \$ 252,000 & \$ 672,000 \\ \text { Variable costs } & 147,000 & 115,500 & 262,500 \\ \text { Contribution margin } & \$ 273,000 & \$ 136,500 & \$ 409,500 \\ \text { Direct fixed costs } & 126,000 & 105,000 & 231,00 \\\text {Segment margin } & \$ 147,000 & \$ 31,500 & \$ 178,500 \\ \text {Allocated common costs } & 63,000 & 47,250 & 110,250 \\\text { ting income (loss) } & \$ 84,000 & \$ 1 5 , 7 5 0 &\$68,250 \\\end{array}$ What would be the operating income for Knickers Corporation as a whole if the Bulls Division were dropped?

• A)$36,750
• B)$68,250
• C)$84,000
• D)$99,750

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