The Milham Corporation Has Two Divisions-East and West

Multiple Choice

The Milham Corporation has two divisions-East and West. The divisions have the following revenues and expenses: Management at Milham is considering the elimination of the West Division. If the West Division were eliminated, its traceable fixed costs could be avoided. Total common corporate costs would be unaffected by this decision. Given these data, the elimination of the West Division would result in an overall company net operating income of:

A) $100,000
B) $80,000
C) $120,000
D) $50,000