The Kelsh Company has two divisions North and South. The divisions have the following revenues and expenses: North South Sales $300,000 $400,000 Less Operating Expenses: Variable Expenses 150,000 200,000 Traceable Fixed Expenses 100,000 100,000 Allocated Common Corporate Expenses 75,000 325,000 50,000 350,000 Net Operating Income (Loss) $( 25,000) $ 50,000 Management at Kelsh is pondering the elimination of North Division. If North Division were eliminated, its traceable fixed expenses could be avoided. The total common corporate expenses would be unaffected. INSTRUCTIONS Compute the amount of total operating income that would result if Kelsh dropped the North Division. Match each of the following with the correct amount: What is the total amount of revenues if the North Division is NOT dropped? What is the total amount of revenue if the North Division is dropped? What is the total amount of contribution margin if the North Division is NOT dropped? What is the total amount of contribution margin in the North Division is dropped? What is the total amount of variable expenses if the North Division is NOT dropped? What is the total amount of variable expenses if the North Division is dropped? What is the total amount of traceable fixed costs if the North Division is NOT dropped? What is the total amount of traceable fixed costs if the North Division is dropped? What is the total amount of allocated common corporate expenses if the North Division is NOT dropped? What is the total amount of allocated common corporate expenses if the North Division is dropped? What is the total amount of net income or (net loss) if the North Division is NOT dropped? What is the total amount of net income or (net loss) if the North Division is dropped? Would you recommend that Kelsh drop the North Division? A.

The Kelsh Company has two divisions North and South. The divisions have the following revenues and expenses: North South Sales $300,000 $400,000 Less Operating Expenses: Variable Expenses 150,000 200,000 Traceable Fixed Expenses 100,000 100,000 Allocated Common Corporate Expenses 75,000 325,000 50,000 350,000 Net Operating Income (Loss) $( 25,000) $ 50,000 Management at Kelsh is pondering the elimination of North Division. If North Division were eliminated, its traceable fixed expenses could be avoided. The total common corporate expenses would be unaffected. INSTRUCTIONS Compute the amount of total operating income that would result if Kelsh dropped the North Division. Match each of the following with the correct amount: What is the total amount of revenues if the North Division is NOT dropped? What is the total amount of revenue if the North Division is dropped? What is the total amount of contribution margin if the North Division is NOT dropped? What is the total amount of contribution margin in the North Division is dropped? What is the total amount of variable expenses if the North Division is NOT dropped? What is the total amount of variable expenses if the North Division is dropped? What is the total amount of traceable fixed costs if the North Division is NOT dropped? What is the total amount of traceable fixed costs if the North Division is dropped? What is the total amount of allocated common corporate expenses if the North Division is NOT dropped? What is the total amount of allocated common corporate expenses if the North Division is dropped? What is the total amount of net income or (net loss) if the North Division is NOT dropped? What is the total amount of net income or (net loss) if the North Division is dropped? Would you recommend that Kelsh drop the North Division? A.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 17E: Materials used by the Instrument Division of Ziegler Inc. are currently purchased from outside...

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Question

The Kelsh Company has two divisions North and South. The divisions have the following revenues and expenses:

	North	South
Sales		$300,000		$400,000
Less Operating Expenses:
Variable Expenses	150,000		200,000
Traceable Fixed Expenses	100,000		100,000
Allocated Common Corporate Expenses	75,000	325,000	50,000	350,000
Net Operating Income (Loss)		$( 25,000)		$ 50,000

Management at Kelsh is pondering the elimination of North Division. If North Division were eliminated, its traceable fixed expenses could be avoided. The total common corporate expenses would be unaffected.

INSTRUCTIONS Compute the amount of total operating income that would result if Kelsh dropped the North Division. Match each of the following with the correct amount:

	What is the total amount of revenues if the North Division is NOT dropped?
	What is the total amount of revenue if the North Division is dropped?
	What is the total amount of contribution margin if the North Division is NOT dropped?
	What is the total amount of contribution margin in the North Division is dropped?
	What is the total amount of variable expenses if the North Division is NOT dropped?
	What is the total amount of variable expenses if the North Division is dropped?
	What is the total amount of traceable fixed costs if the North Division is NOT dropped?
	What is the total amount of traceable fixed costs if the North Division is dropped?
	What is the total amount of allocated common corporate expenses if the North Division is NOT dropped?
	What is the total amount of allocated common corporate expenses if the North Division is dropped?
	What is the total amount of net income or (net loss) if the North Division is NOT dropped?
	What is the total amount of net income or (net loss) if the North Division is dropped?
	Would you recommend that Kelsh drop the North Division?

A.	$200,000
B.	$100,000
C.	$200,000
D.	$700,000
E.	$125,000
F.	$350,000
G.	No
H.	$400,000
I.	$125,000
J.	($25,000)
K.	$200,000
L.	$25,000
M.	$350,000

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