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+Summer 20 Company has two divisions, Consumer and Industrial. The Consumer Division lost $30,000 and the Industrial Division had operating income of $80,000. Management has
+Summer 20 Company has two divisions, Consumer and Industrial. The Consumer Division lost $30,000 and the Industrial Division had operating income of $80,000.
Management has analyzed the situation and wants you to do a differential analysis to determine the increase or decrease in overall operating income based on the following:
Expected decrease in revenues | $200,000 | |||
Expected decrease in total variable costs | $140,000 | |||
Expected decrease in fixed costs | $70,000 |
$130,000 decrease to operating income | ||
$10,000 increase in operating income | ||
$60,000 increase in operating income | ||
$10,000 decrease in operating income |
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