Simpson Corporation Operates Two Divisions with the Following Operating Results

question 209

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)$65,000
• B)$30,000
• C)$15,000
• D)$110,000

Comprehend the use and impact of prototypes in categorization.

Grasp the psychological processes involved in acquiring, retaining, and using knowledge.

Recognize the cognitive abilities involved in thinking, problem-solving, and language use.

Analyze the relationship between mental imagery and brain activity.

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Definitions:

Cost Ledger

A subsidiary ledger containing all cost-related information, including direct and indirect costs ledgers, for a company.

Service Business

A business model focused on delivering non-physical products or services to its consumers.

Overhead

The indirect costs or expenses associated with operating a business, including administrative, office, and rented space expenses.

Materials Ledger

A record of the quantity and value of materials on hand, received, and issued during a period.