The internal financial statements of Vera Incorporated show that their beaded purses incurred an operating loss in the most recent year.There were 25,000 purses sold in that year.Selected financial information about the purse line follows.

If the line of purses were to be discontinued,the company would avoid $16,000 in fixed costs per year.
If Vera Incorporated were to discontinue the line of purses,the change in annual operating income would be a(n)

Question

The internal financial statements of Vera Incorporated show that their beaded purses incurred an operating loss in the most recent year.There were 25,000 purses sold in that year.Selected financial information about the purse line follows.

If the line of purses were to be discontinued,the company would avoid $16,000 in fixed costs per year.
If Vera Incorporated were to discontinue the line of purses,the change in annual operating income would be a(n)

Quizplus · Accepted Answer

D)Contribution Margin $90,000
Less Fixed exp.Avoided 16,000
Decrease in OI $74,000

The Internal Financial Statements of Vera Incorporated Show That Their