US Enterprises has 4 divisions. Management is concerned with the performance of the South division....
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US Enterprises has 4 divisions. Management is concerned with the performance of the South division. They have asked you to evaluate the following information and advise them if they should eliminate the South Division. North $ 100,000 250,000 $87,000 $ 125,000 East South West Sales Gross Profit (69,000) (175,000) (78,000) (95,000) 31,000 75,000 9,000 30,000 Selling & Admin Exp>(18,000) 5,000 (25,000) (16,000) 50,000 (16,000)14,000 Net Income 13,000 Portion of CGS that is Variable Portion of S&A that is Variable 75% 55% 90% 70% 80% 75% 85% 75% If The South Division is eliminated, all variable costs (associated with South) will be eliminated. of the fixed costs, (associated with South) 40% can be eliminated. Given this data, should South be eliminated or not? Why
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