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The Operations of Winston Corporation Are Divided into the Blink

Question 62

Multiple Choice

The operations of Winston Corporation are divided into the Blink Division and the Blur Division.Projections for the next year are as follows:
 Blink  Division  Blur  Division  Total  Sales $280,000$168,000$448,000 Variable costs 98,00077,000175,000 Contribution margin $182,000$91,000$273,000 Direct fixed costs 84,00070,000154,000 Segment margin $98,000$21,000$119,000 Allocated common costs 42,00031,50073,500 Operating income (loss)  $56,000($10,500) $45,500\begin{array} { | l | r | r | r | } \hline & \begin{array} { r } \text { Blink } \\\text { Division }\end{array} & \begin{array} { r } \text { Blur } \\\text { Division }\end{array} & \text { Total } \\\hline \text { Sales } & \$ 280,000 & \$ 168,000 & \$ 448,000 \\\hline \text { Variable costs } & 98,000 & 77,000 & 175,000 \\\hline \text { Contribution margin } & \$ 182,000 & \$ 91,000 & \$ 273,000 \\\hline \text { Direct fixed costs } & 84,000 & 70,000 & 154,000 \\\hline \text { Segment margin } & \$ 98,000 & \$ 21,000 & \$ 119,000 \\\hline \text { Allocated common costs } & 42,000 & 31,500 & 73,500 \\\hline \text { Operating income (loss) } & \$ 56,000 &( \$ 10,500 ) & \$ 45,500 \\\hline\end{array}
If the Blur Division were dropped,Blink Division's sales would increase by 30%.If this happened,the operating income for Winston Corporation as a whole would be:


A) $72,800.
B) $56,000.
C) $79,100.
D) $59,150.

Correct Answer:

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