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Assume a retailing company has two departments_Department A and Department B. The company's most recent contribution format income statement follows: The company says that $140,000
Assume a retailing company has two departments_Department A and Department B. The company's most recent contribution format income statement follows: The company says that $140,000 of the fixed expenses being charged to Department B are sunk costs or allocated costs that will continue if the segment is discontinued. However, if Department B is discontinued the sales in Department A will drop by 11%. What is the financial advantage (disadvantage) of discontinuing Department B? Multiple Choice $(144,000) $(148,000) $(175,300) $(155,300)
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