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Manor Company Plans to Discontinue a Department That Has a Contribution

question 56

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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.What would be the effect on the operating income of Manor Company of discontinuing this department?


Definitions:

Mesozoic

An era of geological time from about 252 to 66 million years ago, known for the rise of dinosaurs and significant volcanic activity.

Cenozoic

The current geological era, beginning around 66 million years ago and characterized by the significant development and spread of mammals on Earth.

Ancestral Rockies

Refers to a mountain range that existed in the western United States during the late Paleozoic era, before the formation of the modern Rocky Mountains.

Island Arcs

A curved chain of volcanic islands located at a tectonic plate boundary, typically with a deep ocean trench on the convex side.

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