Manor Company Plans to Discontinue a Department That Has a Contribution

question 84

Multiple Choice

Manor Company plans to discontinue a department that has a contribution margin of $25,000 and $50,000 in fixed costs. Of the fixed costs, $21,000 cannot be eliminated. The effect on the profit of Manor Company of discontinuing this department would be:

• A)a decrease of $25,000.
• B)a decrease of $4,000.
• C)an increase of $4,000.
• D)an increase of $25,000.

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Definitions:

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Regulations and laws that an entity must follow in its operations, often varying by industry, region, and other factors.

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