Selzone Corporation Operates Two Divisions with the Following Operating Results

question 203

Multiple Choice

Selzone Corporation operates two divisions with the following operating results from last year:

Management is considering whether the Southern Division should be dropped since it incurred an operating loss last year.Allocated common fixed costs would continue for Selzone Corporation whether the division is dropped or not.
If the Southern Division had been dropped at the beginning of last year,what would the total operating income for Selzone Corporation have been for the year?

• A)$15,000
• B)$75,000
• C)$45,000
• D)$90,000

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Definitions:

Clients

Individuals or organizations that engage the professional services or advice of another.

Common Law

A legal system based on judicial precedents and customs rather than statutory laws.

Tort Liability

Legal responsibility that arises from the commission of a tort, which is a civil wrong, such as negligence, that causes harm to another.

Negligence

The failure to exercise a level of care that a reasonably prudent person would in similar circumstances, potentially causing harm or damage.