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Brady Industries is deciding whether or not to discontinue its Agave Division. The division's contribution margin is $48,600 per year. The fixed costs charged to the division total $57,600 but $27,000 would be eliminated if the division is discontinued. If the division is eliminated, Brady's overall operating income would: Multiple Choice O O Decrease by $48,600. Decrease by $18,000. None of the answers is correct. Increase by $9,000. Decrease by $21,600.

Brady Industries is deciding whether or not to discontinue its Agave Division. The division's contribution margin is $48,600 per year. The fixed costs charged to the division total $57,600 but $27,000 would be eliminated if the division is discontinued. If the division is eliminated, Brady's overall operating income would: Multiple Choice O O Decrease by $48,600. Decrease by $18,000. None of the answers is correct. Increase by $9,000. Decrease by $21,600.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Brady Industries is deciding whether or not to discontinue its Agave Division. The division's contribution margin is $48,600 per year. The fixed costs charged to the division total $57,600 but $27,000 would be eliminated if the division is discontinued. If the division is eliminated, Brady's overall operating income would: Multiple Choice O O Decrease by $48,600. Decrease by $18,000. None of the answers is correct.. Increase by $9,000. Decrease by $21,600.
Transcribed Image Text:Brady Industries is deciding whether or not to discontinue its Agave Division. The division's contribution margin is $48,600 per year. The fixed costs charged to the division total $57,600 but $27,000 would be eliminated if the division is discontinued. If the division is eliminated, Brady's overall operating income would: Multiple Choice O O Decrease by $48,600. Decrease by $18,000. None of the answers is correct.. Increase by $9,000. Decrease by $21,600.
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