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Totals Penn Corporation Contribution Margin Income Statement For the Year Ended December 31 Product Lines Department 1 Departments 2-4 Sales Revenue $152.000 $900,000 $2,880,000 Less:
Totals Penn Corporation Contribution Margin Income Statement For the Year Ended December 31 Product Lines Department 1 Departments 2-4 Sales Revenue $152.000 $900,000 $2,880,000 Less: Variable Costs $114.000 $540.000 $1.945,000 Contribution Margin $38.000 $360,000 $935.000 Less: Fixed Costs Manufacturing OH $27.000 $150,000 $413.500 Marketing & Admin. $20.000 $120,000 $288.000 Operating Income $19.000) $264.000 $233,500 loss) Penn Corporation has four departments, all of which appear to be profitable, except for department 1. If department 1 is discontinued. $15.000 in fixed costs would be avoidable as they are directly traceable to department 1. What is the financial advantage (disadvantage) of discontinuing department 1? Multiple Choice O $9.000 O $23,000 ($23.000) O O $1.000
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