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Delta Corp. has three divisions. Alpha and Bravo are profitable, while Charlie is losing money. Delta is considering discontinuing the Charlie division. Revenue and cost
Delta Corp. has three divisions. Alpha and Bravo are profitable, while Charlie is losing money. Delta is considering discontinuing the Charlie division. Revenue and cost information is shown below. Bravo Sales revenue Variable costs Fixed costs Alpha $193,000 83,000 $172,000 50,000 92,000 Charlie $94,000 76,000 36,000 82,000 If Charlie is discontinued, 64% of its fixed costs would be avoided, while the rest would be absorbed by the other two division. If Charlie is discontinued, net income will: -> increase. (enter 1 below) -> decrease (enter 2 below) -> remain the same (enter 3 below)
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