Weston Corporation Is Considering Eliminating a Department That Has a Contribution

question 111

Multiple Choice

Weston Corporation is considering eliminating a department that has a contribution margin of $70,000 and $140,000 in fixed costs. Of the fixed costs, $100,000 cannot be avoided. The effect of eliminating this department on Weston's overall net operating income would be:

• A)an increase of $70,000.
• B)a decrease of $70,000.
• C)an increase of $30,000.
• D)a decrease of $30,000.

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