The Operations of Plastics Inc Required:
A

question 67

Essay

The operations of Plastics Inc. are divided into the Blow Moulding Division and the Injection Moulding Division. Projections for the next year are as follows: $\begin{array}{lrrr}&\text { Blow } & \text { Injection } & \\&\text { Moulding } & \text { Moulding } & \\&\text { Division } & \text { Division } & \text { Total }\\\hline\text { Sales } & \$ 60,000 & \$ 40,000 & \$ 100,000 \\\text { Variable costs } & 20,000 & 15,000 & 35,000\\\text { Contribution margin } & \$ 40,000 & \$ 25,000 & \$ 65,000 \\\text { Direct fixed costs } & 12,500 & 30,000 & 42,500\\\text { Segment margin } & \$ 27,500 & \$(5,000) & \$ 22,500 \\\text { Allocated common costs } & 10,000 & 7,500 & 17,500\\\text { Operating income (loss) }&\$17,500&\$(12,00)&\$5,000\end{array}$ Required:
A. Determine operating income for Plastics Inc. as a whole if the Injection Moulding Division is dropped.
B. Should the Injection Moulding Division be eliminated?

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Definitions:

Differential Carriers

The housing component that contains the differential assembly in a vehicle, allowing for different wheel speeds when cornering.

Oil Fill Holes

Openings designed in mechanical systems for the purpose of adding lubrication oil to ensure smooth operation and reduced friction.

Pinion Angle

The angle between the driveshaft and the pinion gear in the differential, critical for smooth power transmission.

Roadranger CD-50

A type of heavy-duty transmission lubricant designed for use in Roadranger transmissions, offering protection under high-stress conditions.