Granfield Company is considering eliminating its backpack division, which reported an operating loss for the recent year of $41,000. The division sales for the year were $941,000 and the variable costs were $465,000. The fixed costs of the division were $517,000. If the backpack division is dropped, 40% of the fixed costs allocated to that division could be eliminated. The impact on Granfield's operating income for eliminating this business segment would be: Multiple Choice $269,200 increase $476,000 decrease $206,800 increase. $269,200 decrease $476,000 increase

Granfield Company is considering eliminating its backpack division, which reported an operating loss for the recent year of $41,000. The division sales for the year were $941,000 and the variable costs were $465,000. The fixed costs of the division were $517,000. If the backpack division is dropped, 40% of the fixed costs allocated to that division could be eliminated. The impact on Granfield's operating income for eliminating this business segment would be: Multiple Choice $269,200 increase $476,000 decrease $206,800 increase. $269,200 decrease $476,000 increase

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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