The Most Recent Income Statement for the Venetian Branch of Palm

question 28

Multiple Choice

The most recent income statement for the Venetian Branch of Palm Harbor Bank is presented below:
$\begin{array}{ll}\text { Sales } & \$ 57,000 \\\text { Variable costs } & 31,500\\\text { Contribution margin } & 25,500 \\\text { Avoidable fixed costs } & 13,500 \\\text { Unavoidable fixed costs } & 20,000\\\text { Operating loss }&\$(8,000) \end{array}$
Palm Harbor Bank is thinking about eliminating the Venetian Branch.If the branch is eliminated,Palm Harbor Bank's operating income will ________.

• A) increase by $8,000
• B) increase by $25,500
• C) decrease by $12,000
• D) decrease by $31,500

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