The Operations of Winston Corporation Are Divided into the Blink

question 44

Multiple Choice

The operations of Winston Corporation are divided into the Blink Division and the Blur Division.Projections for the next year are as follows:
$$\begin{array} { | l | r | r | r | } \hline & \begin{array} { r } \text { Blink } \\\text { Division }\end{array} & \begin{array} { r } \text { Blur } \\\text { Division }\end{array} & \text { Total } \\\hline \text { Sales } & \$ 280,000 & \$ 168,000 & \$ 448,000 \\\hline \text { Variable costs } & 98,000 & 77,000 & 175,000 \\\hline \text { Contribution margin } & \$ 182,000 & \$ 91,000 & \$ 273,000 \\\hline \text { Direct fixed costs } & 84,000 & 70,000 & 154,000 \\\hline \text { Segment margin } & \$ 98,000 & \$ 21,000 & \$ 119,000 \\\hline \text { Allocated common costs } & 42,000 & 31,500 & 73,500 \\\hline \text { Operating income (loss) } & \$ 56,000 &( \$ 10,500 ) & \$ 45,500 \\\hline\end{array}$$
If the Blur Division were dropped,Blink Division's sales would increase by 30%.If this happened,the operating income for Winston Corporation as a whole would be:

• A) $72,800.
• B) $56,000.
• C) $79,100.
• D) $59,150.

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