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orporation has two departments, Kids and Aduts. The company's most recent monthly contribution format income statement follows Total Sales Variable expenses Contribution Margin Fixed Expenses
orporation has two departments, Kids and Aduts. The company's most recent monthly contribution format income statement follows Total Sales Variable expenses Contribution Margin Fixed Expenses Net operating income oss Department Kids Adults $4.200.000 $3.000.000 $1200,000 2.000.000 1.500.000 500.000 7.200.000 1500,000 700,000 2.200.000 1300.000 900.000 o 200,000 (200.000) study indicates that $50,000 of the fixed expenses being charged to the Acuits Department are sink costs or alocated costs that will cortine even thout Department is dropped in addition, the elimination of the Adults Deparment will result in 20% decrease in the sales of the kids Department Q. Il me Adults Department is dropped, what will be the effect on the net operating income of the Corporation as a whole? Multiple Choice Increase by $180,000 Decrease by $120,000
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