Manor Company Plans to Discontinue a Department That Has a Contribution

question 144

Multiple Choice

Manor Company plans to discontinue a department that has a contribution margin of $24,000 and $48,000 in fixed costs.Of the fixed costs,$21,000 cannot be avoided.The effect of this discontinuance on Manor's overall net operating income would be a(an) :

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