A Study Has Been Conducted to Determine If One of the Departments

question 75

Multiple Choice

A study has been conducted to determine if one of the departments in Barry Corporation should be discontinued. The contribution margin in the department is $60,000 per year. Fixed expenses charged to the department are $75,000 per year. It is estimated that $34,000 of these fixed expenses could be eliminated if the department is discontinued. These data indicate that if the department is discontinued, the company's overall net operating income would:

• A)decrease by $26,000 per year
• B)increase by $26,000 per year
• C)decrease by $15,000 per year
• D)increase by $15,000 per year

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Definitions:

Frequency

A statistic specifying the number or proportion of items in a class that have a given property.

American President

The elected head of state and government of the United States of America, serving as the executive branch leader under the U.S. Constitution.

Asian Descent

Denotes individuals whose ancestry can be traced back to Asia.

Odd Number

An integer not divisible by two, differing from even numbers, and having a remainder of one when divided by two.