The Cook Corporation has two divisions–East and West. The divisions have the following revenues and expenses:

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The Cook Corporation has two divisions–East and West. The divisions have the following revenues and expenses:

East West
Sales 595000 445500
Variable costs 180000 236500
Traceable fixed costs 144000 203400
Allocated common corporate costs 129600 187000
Net operating income (loss) 141400 (181,400

,The management of Cook 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 (loss) of:

Darshita Changed status to publish August 7, 2020
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Calculation if west division is eliminated:

West
Sales 445500
Less:Variable costs 236500
Contribbution lost 209000
Less:Savings in traceable FC 203400
NOI will decrease by 5600

So NOI will decrease by $5600

Darshita Changed status to publish August 7, 2020

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