The Milham Corporation Has Two Divisions-East and West

question 142

Multiple Choice

The Milham Corporation has two divisions-East and West. The divisions have the following revenues and expenses: Management at Milham is considering the elimination of the West Division. If the West Division were eliminated, its traceable fixed costs could be avoided. Total common corporate costs would be unaffected by this decision. Given these data, the elimination of the West Division would result in an overall company net operating income of:

• A)$100,000
• B)$80,000
• C)$120,000
• D)$50,000

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Definitions:

Salary Cut

A reduction in the amount of payment or compensation that an employee receives from their employer.

Biological Motive

An innate drive derived from biological needs that prompts an organism to take action.

Drive

An internal motivational state created by physiological or psychological needs.

Extrinsic Motivation

A form of motivation that drives individuals to perform tasks and engage in activities mainly because of external rewards or to avoid punishment.