Decision on shut down a division.
Cameron Company has recorded the following information about the results of its operations for the first quarter:
|
|
Total Company
|
Southern Division
|
Northern Division
|
|
Sales revenues
|
$200,000
|
$ 80,000
|
$120,000
|
|
Variable cost of sales
|
$ 60,000
|
$ 30,000
|
$30,000
|
|
Fixed costs:
|
|
Common
|
$100,000
|
25,000
|
75,000
|
|
Traceable
|
$ 50,000
|
20,000
|
30,000
|
Which alternative would most likely improve this company's financial performance, overall?
a) shut down Southern Division
b) shut down Northern Division
c) reduce common fixed costs
d) reduce traceable fixed costs