The Most Recent Income Statement for the Parma Branch of the Dinero

question 151

Multiple Choice

The most recent income statement for the Parma Branch of the Dinero Company is presented below. $\begin{array}{ll}\text { Sales } & \$ 57,000 \\\text { Variable costs } & \underline{31,500} \\\text { Contribution margin } & \$ 25,500\\\text { Fixed costs: }\\\text { Avoidable } & 13,500 \\\text { Unavoidable } & 18,000\\\text { Operating income }&\$16,000\end{array}$ If the Parma Branch is eliminated and the space is rented for $24,000, operating income will be:

• A) increased by $24,000
• B) decreased by $30,000
• C) decreased by $12,000
• D) increased by $12,000