Question
Shelley Company has five divisions. They plan to drop one division with the following information: Sales $50,000 Variable Costs 30,000 Contribution Margin 20,000 Fixed Expenses
Shelley Company has five divisions. They plan to drop one division with the following information:
| Sales | $50,000 |
| Variable Costs | 30,000 |
| Contribution Margin | 20,000 |
| Fixed Expenses | 50,000 |
| Income | ($30,000) |
Of the Fixed Expenses charged to this division, $20,000 are sunk and the rest can be eliminated if the division is dropped. The effect of dropping the division on Shelley Company income would be:
Group of answer choices
a decrease of $20,000
an increase of $20,000
an increase of $25,000
an increase of $10,000
a decrease of $15,000
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Authors: Phara Estime McLachlan
1st Edition
1783001003, 978-1783001002
