TB MC Qu. 23-81 (Algo) Granfield Company is considering...

Granfield Company is considering eliminating its backpack division, which reported a loss for the recent year of $43,000 as shown below.

Segment Income (Loss)
Sales	$ 964,000
Variable costs	477,000
Contribution margin	487,000
Fixed costs	530,000
Income (loss)	$ (43,000)

If the backpack division is dropped, all $477,000 of its variable costs are avoidable, and $212,000 of its fixed costs are avoidable. The impact on Granfields income from eliminating this business segment would be:

rev: 09_11_2021_QC_CS-277012

Multiple Choice

• $487,000 decrease

• $212,000 increase

• $275,000 decrease

• $487,000 increase

• $275,000 increase