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What is the profit effect of the company

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Reference no: EM132041991

Question - Central administration allocates its costs of $1 million to the two operating divisions (A and B) of the company. These costs are not avoidable if one division is dropped. With an equal allocation of these costs to both divisions, Division A has a profit of $300,000 and Division B has a loss of $100,000.

What is the profit effect of the company if Division B is dropped and all other division costs are avoidable?

Reference no: EM132041991

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