Fabio Corporation Is Considering Eliminating a Department That Has a Contribution

question 160

Multiple Choice

Fabio Corporation is considering eliminating a department that has a contribution margin of $30,000 and $60,000 in fixed costs. Of the fixed costs, $15,000 cannot be avoided. The effect of eliminating this department on Fabio's overall net operating income would be:

• A)a decrease of $30,000.
• B)an increase of $30,000.
• C)a decrease of $15,000.
• D)an increase of $15,000.