The Following Information Relates to Next Year's Projected Operating Results

question 30

Multiple Choice

The following information relates to next year's projected operating results of the Consumer Division of Xampa Corporation:
If the Consumer Division is eliminated,$1,600,000 of the above fixed expenses could be avoided.What will be the effect on Xampa's profit next year if Consumer Division is eliminated?

• A)$300,000 decrease
• B)$300,000 increase
• C)$200,000 decrease
• D)$200,000 increase