The Most Recent Income Statement for the South Branch of First

question 59

Multiple Choice

The most recent income statement for the South Branch of First Financial Bank is presented below:
$\begin{array}{ll}\text { Sales } & \$ 57,000 \\\text { Variable costs } & 31,500\\\text { Contribution margin } & 25,500 \\\text { Avoidable fixed costs } & 13,500 \\\text { Unavoidable fixed costs } & 18,000\\\text { Operating loss }&\$(6,000) \end{array}$
First Financial Bank is thinking about eliminating the South Branch.If the branch is eliminated,First Financial Bank's operating income will ________.

• A) increase by $6,000
• B) increase by $25,500
• C) decrease by $12,000
• D) decrease by $31,500

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Definitions:

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