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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Definitions:

Maison Carrée

An ancient Roman temple in Nîmes, France, well preserved and notable for its classical architecture and historical significance.

Pantheon

An ancient Roman temple in Rome, Italy, dedicated to all the gods of pagan Rome, now a church, renowned for its massive dome and oculus.

Hadrian

A Roman Emperor known for his substantial building projects throughout the Roman Empire, including Hadrian's Wall in Britain.

Augustus

The first Roman emperor, ruling from 27 B.C. until his death in A.D. 14, and known for initiating the Pax Romana, a period of relative peace in the Roman Empire.