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Jamison Health care is trying to decide if it should eliminate its orthopedic care division. In the last year the orthopedic division had a contribution margin of $500,000 and allocated overhead costs of $600,000, of which $350,000 could be eliminated if the division is dropped. Should Jamison keep or eliminate the division? Required: You must show proper detailed, labeled computations without abbreviations or scratch outs that prove which option is preferable. Your solution needs to also show a computation of exactly how much money is saved by selecting your solution over the alternative. For example, after your computations, your final conclusion which goes below your computations, would say something like “Jamison can save $4,000 by keeping the division.”Show transcribed image text Jamison Health care is trying to decide if it should eliminate its orthopedic care division. In the last year the orthopedic division had a contribution margin of $500,000 and allocated overhead costs of $600,000, of which $350,000 could be eliminated if the division is dropped. Should Jamison keep or eliminate the division? Required: You must show proper detailed, labeled computations without abbreviations or scratch outs that prove which option is preferable. Your solution needs to also show a computation of exactly how much money is saved by selecting your solution over the alternative. For example, after your computations, your final conclusion which goes below your computations, would say something like “Jamison can save $4,000 by keeping the division.”
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