A study has been conducted to determine if one of the departments in Parry Company should be discontinued. The contribution margin in the department is

$$70,000$ per year. Fixed expenses charged to the department are $$63,000$ per year. It is estimated that $$50,000$ of these fixed expenses could be eliminated if the

department is discontinued. These data indicate that if the department were discontinued, the company's overall operating income per year would change by how

much?

Multiple Choice

An increase of $$10,000.$

A decrease of $$20,000.$

An increase of $$25,000.$

A decrease of $$25,000.$