A- ABC Corporation has two divisions--Women and Men. The divisions have the following revenues and expenses:...

 

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A- ABC Corporation has two divisions--Women and Men. The divisions have the following revenues and expenses: Women Men Sales S 100,000 S 110,000 Variable costs 40,000 57,000 Traceable fixed costs 30,000 36,000 Allocated common corporate costs 27,000 34,000 Net income (loss) $ 3,000 S (17,000) The management of ABC is considering the elimination of the Men Division. If the Men Division were eliminated, its traceable fixed costs could be avoided. Total common corporate costs would be unaffected by this decision. Required: 1- Should the Company drop Men division? Explain in light of the effect of your decision on the you answer with the necessary calculations). 2- Will your decision be changed if you know that all traceable fixed costs to Men division could be company profitability. (Support avoided and 40% of total common corporate costs assigned to Men division would be unaffected by this decision. (Support you answer with the (12 marks) necessary calculations). A- ABC Corporation has two divisions--Women and Men. The divisions have the following revenues and expenses: Women Men Sales S 100,000 S 110,000 Variable costs 40,000 57,000 Traceable fixed costs 30,000 36,000 Allocated common corporate costs 27,000 34,000 Net income (loss) $ 3,000 S (17,000) The management of ABC is considering the elimination of the Men Division. If the Men Division were eliminated, its traceable fixed costs could be avoided. Total common corporate costs would be unaffected by this decision. Required: 1- Should the Company drop Men division? Explain in light of the effect of your decision on the you answer with the necessary calculations). 2- Will your decision be changed if you know that all traceable fixed costs to Men division could be company profitability. (Support avoided and 40% of total common corporate costs assigned to Men division would be unaffected by this decision. (Support you answer with the (12 marks) necessary calculations).