Current business segment operations for Whitman, a mass retailer, are presented below.
Management is contemplating the discontinuance of the restaurant segment since "it is losing money." If this segment is discontinued, $30,000 of its fixed costs will be eliminated. In addition, Merchandise and Automotive sales will decrease 5% from their current levels. What will Whitman's total contribution margin be if the restaurant segment is discontinued?
A) $160,000
B) $220,000
C) $367,650
D) $380,000

Question

Current business segment operations for Whitman, a mass retailer, are presented below.
 Management is contemplating the discontinuance of the restaurant segment since "it is losing money." If this segment is discontinued, $30,000 of its fixed costs will be eliminated. In addition, Merchandise and Automotive sales will decrease 5% from their current levels. What will Whitman's total contribution margin be if the restaurant segment is discontinued?
A) $160,000 
B) $220,000 
C) $367,650 
D) $380,000

Quizplus · Accepted Answer

The Answer of Current business segment operations for Whitman, a mass retailer, are presented below.
 Management is contemplating the discontinuance of the restaurant segment since "it is losing money." If this segment is discontinued, $30,000 of its fixed costs will be eliminated. In addition, Merchandise and Automotive sales will decrease 5% from their current levels. What will Whitman's total contribution margin be if the restaurant segment is discontinued?
A) $160,000 
B) $220,000 
C) $367,650 
D) $380,000

Current Business Segment Operations for Whitman, a Mass Retailer, Are