Question
Galaxy Co. plans to discontinue a department that has a $60,000 contribution margin and $96,000 of fixed costs. Of these fixed costs, $42,000 cannot be
Galaxy Co. plans to discontinue a department that has a $60,000 contribution margin and $96,000 of fixed costs. Of these fixed costs, $42,000 cannot be avoided. What would be the effect of discontinuing the department on Galaxy's overall operating income?
A.An increase of $6,000.
B.A decrease of $6,000.
C.An increase of $48,000.
D.A decrease of $48,000.
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Accounting Information Systems
Authors: James Hall
9th Edition
1305465113, 9781305465114
