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A Study Has Been Conducted to Determine If One of the Departments

question 45

Multiple Choice

A study has been conducted to determine if one of the departments in Parry Company should be discontinued.The contribution margin in the department is $50,000 per year.Fixed expenses charged to the department are $65,000 per year.It is estimated that $40,000 of these fixed expenses could be eliminated if the department is discontinued.These data indicate that if the department were discontinued,the company's overall operating income per year would change by how much?


Definitions:

Culture Shock

The confusion and discomfort a person experiences when in an unfamiliar culture.

Unfamiliar Culture

A culture that is not known or experienced before, often encountered in international travel or business.

Political Risk

The possible loss of investment or control over a foreign asset because of political changes in the host country.

Host Country

The country in which a multinational company operates a facility or office, outside of its home country.

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