Jerry Enterprises Is Considering Whether to Discontinue a Division That

question 207

Multiple Choice

Jerry Enterprises is considering whether to discontinue a division that generates a total contribution margin of $65,000 per year.Fixed manufacturing overhead allocated to this division is $50,000,of which 18,000 is unavoidable.If Jerry Enterprises were to eliminate this division,the effect on the company's operating income would be a (n)

• A)increase in total operating income of $33,000.
• B)decrease in total operating income of $33,000.
• C)increase in total operating income of $47,000.
• D)decrease in total operating income of $47,000.

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Taft-Hartley Act

A 1947 federal law that imposed several restrictions on labor unions, including prohibiting certain types of strikes and requiring union leaders to swear they were not communists.

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