Ron Jensen,the Controller of Inca Industries,has Prepared an Analysis to Help

question 53

Multiple Choice

Ron Jensen,the controller of Inca Industries,has prepared an analysis to help management determine whether one of Inca's departments should be eliminated.The department's contribution margin is $44,000.The fixed expenses charged to the department total $75,000.Of the fixed expenses,Jensen estimates that $36,000 of those expenses would be eliminated if the department were discontinued.Based on Jensen's analysis,if the department is eliminated,Inca's overall operating income would

• A) Increase by $8,000 per year.
• B) Decrease by $8,000 per year.
• C) Decrease by $31,000 per year.
• D) Decrease by $5,000 per year.

---

Definitions:

Job Description

A detailed outline of the roles, duties, responsibilities, and qualifications required for a specific position within an organization.

Qualifications

The credentials, skills, or abilities required for a particular job or activity.

Commission Compensation

A form of payment to employees based on the amount of sales they generate, typically a percentage of the sales value.

Earnings

This term describes the amount of money that a company makes after paying all its costs and expenses.