XYZ Company Has Four Sales Territories and Is Considering Eliminating

question 91

Multiple Choice

XYZ Company has four sales territories and is considering eliminating the Great Lakes Region which had sales of $100,000,direct expenses of $70,000 and indirect expenses of $50,000.If the Great Lakes Region is eliminated,80% of the indirect expenses would still remain.If this region were to be eliminated,the company's overall net income would be:

• A) $20,000 higher.
• B) $30,000 higher.
• C) $20,000 lower.
• D) $40,000 lower.

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