Consider the Following Portion of a Segmented Income Statement for the Year

question 103

Multiple Choice

Consider the following portion of a segmented income statement for the year just ended. Assume that the fixed expenses of Division X include $30,000 of direct expenses and that the discontinuance of the department will not affect the sales of the other departments nor reduce the common expenses. Division X
What would be the effect on the firm's operating income if Division X were discontinued?

• A) increase $10,000
• B) decrease $40,000
• C) decrease $100,000
• D) decrease $10,000

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Definitions:

Low-Income Families

Households earning significantly below the median income of their geographical location, often leading to financial stress and limited access to resources.

Behavioral Changes

Modifications or adaptations in human or animal behavior, often as a result of psychological, social, or environmental factors.

Day Care

A service that provides care and supervision for children during the day, particularly while parents are at work.

Cross-Cultural

Pertains to or comparing different cultures or the comparison of different societal norms and values.