Question
Fabio Corporation is considering eliminating a department that has a contribution margin of $30,000 and $60,000 in fixed costs. Of the fixed costs, $15,000 cannot
Fabio Corporation is considering eliminating a department that has a contribution margin of $30,000 and $60,000 in fixed costs. Of the fixed costs, $15,000 cannot be avoided. The effect of eliminating this department on Fabio's overall net operating income would be:
- (a)A decrease of $30,000
- (b)An increase of $30,000
- (c)A decrease of $15,000
- (d)An increase of $15,000
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Financial and Managerial Accounting
Authors: John J Wild, Ken W. Shaw
8th edition
1260247856, 978-1260247855
