Kim Sunshades Company's western territory's forecasted income statement for the upcoming year is as follows:
-The company's management is considering dropping the western territory and has determined that $310,000 of the fixed expenses is avoidable.What is the change in Kim Company's forecasted operating for the upcoming year if the western territory is dropped? Assume the company predicts an operating loss across the entire company.

Question

Kim Sunshades Company's western territory's forecasted income statement for the upcoming year is as follows:  
-The company's management is considering dropping the western territory and has determined that $310,000 of the fixed expenses is avoidable.What is the change in Kim Company's forecasted operating for the upcoming year if the western territory is dropped? Assume the company predicts an operating loss across the entire company.

Quizplus · Accepted Answer

If the western territory is dropped, the company will save $310,000 in avoidable fixed expenses. If the operating loss across the entire company is $330,000, dropping the territory will reduce the loss by $310,000, resulting in a net increase in operating loss by $20,000.

Kim Sunshades Company's Western Territory's Forecasted Income Statement for the Upcoming