Valdez Company is considering eliminating its kitchen division, which reported an operating loss of $53,000 for the past year. Kitchen division sales for the year were $1,040,000, and its variable costs were $775,000. The fixed costs of the division were $318,000. If the kitchen division is dropped, 60% of the foxed costs allocated to it could be eliminated. The impact on Valdez's operating income from eliminating this business segment would be:

$200,000

Explanation:

The impact on Valdez's operating income from eliminating this business segment would be:

= Saving in fixed costs - Loss of contribution margin

= ($775,000*60%) - ($1,040,000 - $775,000)

= $465,000 - $265,000

= $200,000

n

explanation:

​participate in networking opportunities that allow you to get to know potential clients, other entrepreneurs, influential people in your community, etc. focus on doing everything you can to cultivate posting word of mouth advertisin