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Business, 15.07.2021 17:40 quynhnguyen7454

XYZ currently has two divisions which had the following operating results for last year: Cork Division Rubber Division
Sales $480,000 $290,000
Variable costs 200,000 180,000
Contribution margin 280,000 110,000
Traceable fixed costs 160,000 100,000
Segment margin 120,000 10,000
Allocated common
corporate fixed costs 60,000 30,000
Net operating income (loss) $60,000 $(20,000)

Because the Rubber Division sustained a loss, the president of Vanikoro is considering the elimination of this division. All of the division's traceable fixed costs could be avoided if the division was dropped. None of the allocated common corporate fixed costs could be avoided. If the Rubber Division was dropped at the beginning of last year, how much higher or lower would Vanikoro's total net operating income have been for the year?

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