Manor Company Plans to Discontinue a Department That Has a Contribution

question 56

Multiple Choice

Manor Company plans to discontinue a department that has a contribution margin of £24,000 and £48,000 in fixed costs. Of the fixed costs, £21,000 cannot be eliminated. The effect of this discontinuance on Manor's net operating income would be a(an)

• A)decrease of £3,000.
• B)increase of £3,000.
• C)decrease of £24,000.
• D)increase of £24,000.

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Definitions:

Folkways

Norms for routine or casual interaction that guide everyday behavior in society, but whose violation is not considered serious.

Negative Sanctions

Penalties or punishments imposed to enforce conformity to social norms, aiming to discourage unacceptable or deviant behavior.

Cultural Universals

Patterns or traits that are globally common to all societies, such as language, religion, and family structures.

Situational Norms

Shared expectations and rules guiding behavior in specific situations, environments, or contexts.