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Marisol's Sunglass Company's western territory's forecasted income statement for the upcoming year is as follows: Sales revenue $840,000 Variable costs (520,000) Contribution margin $320,000 Fixed costs (480,000) $(160,000) Operating loss The company's management is considering dropping the western territory and has determined that $310,000 of the fixed expenses is avoidable. What is the change in Marisol's Sunglass Company's forecasted operating for the upcoming year if the western territory is dropped? Assume the company predicts an operating loss across the entire company. OA. Operating loss will increase by $10,000. OB. Operating profit will increase by $320,000 OC. Operating profit will decrease by $320,000. OD. Operating loss will decrease by $10,000.

Marisol's Sunglass Company's western territory's forecasted income statement for the upcoming year is as follows: Sales revenue $840,000 Variable costs (520,000) Contribution margin $320,000 Fixed costs (480,000) $(160,000) Operating loss The company's management is considering dropping the western territory and has determined that $310,000 of the fixed expenses is avoidable. What is the change in Marisol's Sunglass Company's forecasted operating for the upcoming year if the western territory is dropped? Assume the company predicts an operating loss across the entire company. OA. Operating loss will increase by $10,000. OB. Operating profit will increase by $320,000 OC. Operating profit will decrease by $320,000. OD. Operating loss will decrease by $10,000.

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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Marisol's Sunglass Company's western territory's forecasted income statement for the upcoming year is as follows: Sales revenue $840,000 Variable costs (520,000) Contribution margin $320,000 Fixed costs (480,000) $(160,000) Operating loss The company's management is considering dropping the western territory and has determined that $310,000 of the fixed expenses is avoidable. What is the change in Marisol's Sunglass Company's forecasted operating for the upcoming year if the western territory is dropped? Assume the company predicts an operating loss across the entire company. OA. Operating loss will increase by $10,000. OB. Operating profit will increase by $320,000 OC. Operating profit will decrease by $320,000. OD. Operating loss will decrease by $10,000.
Transcribed Image Text:Marisol's Sunglass Company's western territory's forecasted income statement for the upcoming year is as follows: Sales revenue $840,000 Variable costs (520,000) Contribution margin $320,000 Fixed costs (480,000) $(160,000) Operating loss The company's management is considering dropping the western territory and has determined that $310,000 of the fixed expenses is avoidable. What is the change in Marisol's Sunglass Company's forecasted operating for the upcoming year if the western territory is dropped? Assume the company predicts an operating loss across the entire company. OA. Operating loss will increase by $10,000. OB. Operating profit will increase by $320,000 OC. Operating profit will decrease by $320,000. OD. Operating loss will decrease by $10,000.
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