The Operations of Slickers Corporation Are Divided into the North

question 104

Multiple Choice

The operations of Slickers Corporation are divided into the North Division and the South Division.Projections for the next year are as follows: $\begin{array}{lrrr}&\text { North } & \text { South } & \\&\text { Division } & \text { Division } & \text { Total }\\\text { Sales } & \$ 420,000 & \$ 252,000 & \$ 672,000 \\\text { Variable costs } & 147,000 & 115,500 & 262,500\\\text { Contribution margin } & \$ 273,000 & \$ 136,500 & \$ 409,500 \\\text { Direct fixed costs } & 126,000 & 105,000 & 231,000\\\text { Segment margin } & \$ 147,000 & \$ 31,500 & \$ 178,500 \\\text { Allocated common costs } & 63,000 & 47,250 & 110,250 \\\text { Operating income (loss) } & \$ 84,000 & \$(15,750) & \$ 68,250\\\end{array}$ Suppose the South Division were dropped.What would be the operating income for Slickers Corporation?

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

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Definitions:

Carrying Value

The net amount at which an asset or liability is recognized in the balance sheet, taking into account factors like amortization, impairment, and depreciation.

Premium

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Annual Amortization

The portion of the total amortization expense allocated within a single fiscal year.

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The cost incurred by an entity for borrowed funds, typically reported on the income statement within the period the interest is incurred.