Brandy Company Is Deciding Whether or Not to Discontinue One

question 104

Multiple Choice

Brandy Company is deciding whether or not to discontinue one of its divisions.The division's contribution margin is $27,000 per year.The fixed costs charged to the division total $32,000,but $15,000 would be eliminated if the division is discontinued.If the division is eliminated,the overall operating income would

• A) Decrease by $9,000
• B) Decrease by $12,000
• C) Decrease by $15,000
• D) Increase by $27,000

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