Need Help with Number 3 Please & Thank you

2.The Milham Company has two divisions - East and West. The divisions have the following revenues and expenses: East West Sales... $720,000 $350,000 370,000 240,000 Variable costs. Traceable fixed costs. 130,000 80,000 120,000 50,000 Allocated common corporate costs Net operating income (loss).. $100.000 $(20.000) Management at Milham is pondering the elimination of the West Division since it has shown an operating loss for the past several years. If the West Division were eliminated, its traceable fixed costs could be avoided. Total common corporate costs would be unaffected by this decision. 3. XYZ Company produces three products from a single operation. Product A sells for $3 per unit. Product B for $6 per unit, and C for $9 per unit. When B is processed further, there are additional unit costs of $3, and its new selling price is $10 per unit. Each product is allocated $2 of joint costs from the initial production operation. Required: Should Product B be processed further, or should it be sold at the end of the initial operation? Show your work. 1. Lost contribution margin $(110000) Avoidable $80000 fixed cost Financial (disadvantage) of elimination $(30000) of west division If west division is closed company's profit will decrease by $30000 so company should not eliminate west division. Working note -1 Lost contribution margin = sales - variable cost = $350,000 - $240,000 = $110,000 Segmented Income statement East Sales $720000 Variable cost $370000 Contribution marg $350000 in Traceable fixed c $130000 ost Segment margin $220000 Allocated commo $120000 n corporate cost Net operating inc ome (loss) $100000 West $350000 $240000 $110000 $80000 $30000 $50000 $(20000)