A study has been conducted to determine if one of the de discontinued. The contribution margin in the department is $60,000 per year. Fixed expenses charged to the department are $75,000 per year. It is estimated that $45,000 of these fixed expenses could be eliminated if the department is discontinued. These data indicate that if the department is discontinued, the company's overall net operating income would: O decrease by $26,000 per year O increase by $26,000 per year decrease by $15.000 per year
A study has been conducted to determine if one of the de discontinued. The contribution margin in the department is $60,000 per year. Fixed expenses charged to the department are $75,000 per year. It is estimated that $45,000 of these fixed expenses could be eliminated if the department is discontinued. These data indicate that if the department is discontinued, the company's overall net operating income would: O decrease by $26,000 per year O increase by $26,000 per year decrease by $15.000 per year
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 12MC: Youngstown Construction plans to discontinue its rooting segment. Last year, this segment generated...
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![A study has been conducted to determine if one of the departments in Tempest Corporation should be
discontinued. The contribution margin in the department is $60,000 per year. Fixed expenses charged to the
department are $75,000 per year. It is estimated that $45,000 of these fixed expenses could be eliminated if
the department is discontinued. These data indicate that if the department is discontinued, the company's
overall net operating income would:
O decrease by $26,000 per year
O increase by $26,000 per year
O decrease by $15,000 per year
O increase by $15,000 per year](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb4722c6a-86bc-476d-9f88-f040145a1634%2F0fa98e61-805a-4748-8750-e408c56a38f8%2F00m9nji_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A study has been conducted to determine if one of the departments in Tempest Corporation should be
discontinued. The contribution margin in the department is $60,000 per year. Fixed expenses charged to the
department are $75,000 per year. It is estimated that $45,000 of these fixed expenses could be eliminated if
the department is discontinued. These data indicate that if the department is discontinued, the company's
overall net operating income would:
O decrease by $26,000 per year
O increase by $26,000 per year
O decrease by $15,000 per year
O increase by $15,000 per year
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