Brandy Company is deciding whether or not to discontinue one of its divisions.The division's contribution margin is $27,000 per year.The fixed costs charged to the division total $32,000,but $15,000 would be eliminated if the division is discontinued.If the division is eliminated,the overall operating income would
A) Decrease by $9,000
B) Decrease by $12,000
C) Decrease by $15,000
D) Increase by $27,000

Question

Quizplus · Accepted Answer

The Answer of Brandy Company is deciding whether or not to discontinue one of its divisions.The division's contribution margin is $27,000 per year.The fixed costs charged to the division total $32,000,but $15,000 would be eliminated if the division is discontinued.If the division is eliminated,the overall operating income would
A) Decrease by $9,000
B) Decrease by $12,000
C) Decrease by $15,000
D) Increase by $27,000

Brandy Company Is Deciding Whether or Not to Discontinue One