1. Fixed vs Variable cost preference. Bates operates a kiosk at a local mall, selling duck calls for $30 each. The variable cost to make a duck call is $18. A new mall is opening where Bates wants to locate a new kiosk. The mall operator offers the following two options for Bates: 1. paying a fixed rent of $15,000 a month, or: 2. paying a fixed rent of $9,000 per month plus 10% of revenue earned from each duck call. The amount of monthly sales (in units) at which Bates would be indifferent as to which plan to select is: A) 1,900 B) 2,000 C) 1,500 D) 1,600 2. Product (Segment) elimination decision. The Kelsh Company has two divisions-- North and South. The divisions have the following revenues and expenses: North South $900,000 $800,000 Sales Variable expenses Traceable fixed expenses Allocated common corporate expenses Net operating income (loss) 450,000 260,000 240,000 190,000 ($50,000) $100,000 300,000 210,000 Management at Kelsh is pondering the elimination of the North Division. If the North Division were eliminated, its traceable fixed expenses could be avoided. The total common corporate expenses would be unaffected. Given this data, the elimination of the North Division would result in an overall compan operating income of A) $50,000 B) ($140,000) C) $100,000 D) $150,000