Question

The following is the income statement by segments for JacobCorp.

Income Statement

 

 

Company

 

Television

 

Computer

Sales

 

$ 490,000

 

$ 330,000

 

$ 160,000

Variable costs

 

     230,000

 

     150,000

 

      80,000

Contribution Margin

 

     260,000

 

     180,000

 

      80,000

Traceable Fixed Costs

 

     165,000

 

      90,000

 

      75,000

Common costs Allocated

 

      60,000

 

      39,600

 

      20,400

Profit

 

$    35,000

 

$    50,400

 

$ (15,400)

             

 

      The company is consideringeliminating Computer division as it currently shows a loss of$15,400. Determine the company total profit if the Computerdivision is eliminated.

 

a.

$24,600

 

b.

$55,400

 

c.

$30,000

 

d.

$45,000

 

e.

Correct answer not listed

 

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