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The following information relates to next year's projected operating results of the Consumer Division of Xampa Corporation: Contribution Margin...... $1,800,000 Fixed expenses............ 2,100,000 Net Operating
The following information relates to next year's projected operating results of the Consumer Division of Xampa Corporation:
Contribution Margin...... $1,800,000
Fixed expenses............ 2,100,000
Net Operating Loss........$(300,000)
If the Consumer Division were eliminated, $1,600,000 of the above fixed expenses could be avoided. What will be the effect on Xampa's profit next year if Consumer Division is eliminated?
A. $200,000 increase
B. $300,000 increase
C. $300,000 decrease
D. $200,000 decrease
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