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The following information relates to next year's projected operating results of the Aluminum Division of Angelina Jolie's Corporation: Contribution margin...................... $1,500,000 Fixed expenses.............................. (1,700,000) Net
The following information relates to next year's projected operating results of the Aluminum Division of Angelina Jolie's Corporation:
Contribution margin...................... | $1,500,000 | |
Fixed expenses.............................. | (1,700,000) | |
Net operating loss.......................... | $(200,000) |
If Aluminum Division of Angelina Jolie is dropped, $1,000,000 of the above fixed expenses would be eliminated. What will be the effect on Angelina Jolie's profit next year if Aluminum Division is dropped instead of being kept?
A) $500,000 decrease
B) $800,000 increase
C) $1,000,000 increase
D) $1,200,000 increase
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