Valber Company Is Considering Eliminating Its Phone Division

question 110

Multiple Choice

Valber Company is considering eliminating its phone division. The company allocates fixed costs based on sales. If the phone division is dropped, $150,000 of the fixed costs allocated to that division could be eliminated. The impact on Valber's operating income from eliminating the phone division would be:

• A) $30,000 increase
• B) $150,000 increase
• C) $150,000 decrease
• D) $15,000 increase
• E) $30,000 decrease

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Definitions:

Section 504

A part of the Rehabilitation Act of 1973 that prohibits discrimination against individuals with disabilities in programs that receive federal financial assistance.

Ethical Decision Making

The process of choosing actions that are consistent with one’s principles and values in a moral context.

Employment

The condition of working for pay in a job, profession, or business, whether part-time or full-time.

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Having sound basis in logic or fact; accurately representing the intended meaning or the truth of the situation.