Selzone Corporation Operates Two Divisions with the Following Operating Results

question 64

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?

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Definitions:

Responsibility Levels

This concept refers to the hierarchy within an organization that delineates the scope of authority, decision-making power, and accountability.

Budget Period

The specific time period for which a budget is prepared, outlining expected revenues, expenses, and resource allocations.

Future Outcomes

Predictions or expectations about what will happen in the future, often used in the context of financial forecasting or planning.

Master Budget

A comprehensive financial planning document that consolidates all of a company's budgets and plans for operations, financing, and investment activities.