Manor Company Plans to Discontinue a Department That Has a Contribution

question 22

Multiple Choice

Manor Company plans to discontinue a department that has a contribution margin of $24,000 and $48,000 in fixed costs.:

• A)decrease of $3,000.
• B)increase of $24,000.
• C)decrease of $24,000.
• D)increase of $3,000.

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Definitions:

Discount

The reduction applied to the usual cost of goods, services, or securities.

Operating Expenses

Costs associated with running the day-to-day operations of a business, excluding the cost of goods sold, typically including things like salaries, rent, and utilities.

Profit

The financial gain obtained when the amount earned from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.

Selling Price

The amount at which an item or service is sold to the customer.