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Need Explanation. Greenland Co., an organic products retailer, has two departments: Housewares and Gardenwares. The company's most recent monthly contribution margin format income statement is
Need Explanation.
Greenland Co., an organic products retailer, has two departments: Housewares and Gardenwares. The company's most recent monthly contribution margin format income statement is as follows: Internal reports indicate that $38, 100 of the fixed expenses being charged to Gardenwares are allocated costs that will continue even if the Gardenwares Department is dropped. Also, eliminating the Gardenwares Department will result in a 19% decrease in sales for the Housewares Department. What is the impact to the total company's profit if the Gardenwares Department is dropped? Profit would decrease by $146, 670 Profit would decrease by $102, 780 Profit would decrease by $32, 100 Profit would increase by $6,000Step by Step Solution
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