X Corp has three segments; A,B and C. The segment margin of A, B and C are 11,000, 12,000 and 9,000, respectively. Allocated fixed cost (common cost) of A is 30% of the total common cost. Segment A has operating income of 7,000 before tax. X needs to eliminate one segment because of decrease in company demand. Tax rate is 25%. What will be the overall corporation net income before tax (operating income) after eliminating the appropriate segment?

Answer rating: 100% (QA)

Lets do the calculations 1 Total common cost 7000 030 2333333 ... View the full answer