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eBook Party Supply is trying to decide whether or not to continue its costume segment. The information shown is available for Party Supplys business segments.

eBook

Party Supply is trying to decide whether or not to continue its costume segment. The information shown is available for Party Supplys business segments. Assume that neither the Direct fixed costs nor the Allocated common fixed costs may be eliminated, but will be allocated to the two remaining segments.

Costumes Party Supplies Floral Decorations
Sales $160,000 $111,000 $210,000
Variable costs 85,000 50,000 120,000
Contribution margin $75,000 $61,000 $90,000
Direct fixed costs 51,000 21,000 24,000
Allocated common fixed costs 30,000 24,000 31,000
Net income $(6,000) $16,000 $34,000

If costumes are dropped, what change will occur to profit?

Profit will

increasedecrease

by $fill in the blank 2

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