Wallen Corporation Is Considering Eliminating a Department That Has an Annual

question 401

Multiple Choice

Wallen Corporation is considering eliminating a department that has an annual contribution margin of $80,000 and $160,000 in annual fixed costs. Of the fixed costs, $90,000 cannot be avoided. The annual financial advantage (disadvantage) for the company of eliminating this department would be:

• A) $10,000
• B) ($10,000)
• C) $80,000
• D) ($80,000)