A Company Expects Its Three Departments to Yield the Following

question 57

Multiple Choice

A company expects its three departments to yield the following income for next year:
$\begin{array}{lrrr} & \text { Dept.A } & \text { Dept. B } & \text { Dept. C } \\ \text { Sales } & \$ 6,000 & \$ 5,000 & 6,800 \\\text { Expenses } & & & \\\text { Avoidable } & 2,000 & 1,000 & 4,000 \\\text { Unavoidable } & 1,500 & 3,000 & 2,500 \\ \text { Total expenses } & 3,500 & 4,000 & 6,500 \\\text { Net income(loss) } & \$ 2,500 & \$ 1,000 & \$ 300\end{array}$
Compute the change to the company's total net income if Dept.C is eliminated.

• A) $300 decrease
• B) $300 increase
• C) $2,800 decrease
• D) $2,800 increase
• E) $6,800 decrease

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