Department XYZ Had Sales of $90,000,direct Expenses of $60,000 and Indirect

question 7

Multiple Choice

Department XYZ had sales of $90,000,direct expenses of $60,000 and indirect expenses of $50,000.The indirect expenses allocated to this department would have been incurred whether or not the department existed.If this department had been eliminated,the company's reported net income would have been

• A) $20,000 higher.
• B) $30,000 higher.
• C) $20,000 lower.
• D) $30,000 lower.