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A Company Expects Its Three Departments to Yield the Following

Question 100

Multiple Choice

A company expects its three departments to yield the following income for next year:
 Dept.A  Dept. B  Dept. C  Sales $6,000$5,0006,800 Expenses  Avoidable 2,0001,0004,000 Unavoidable 1,5003,0002,500 Total expenses 3,5004,0006,500 Net income(loss)  $2,500$1,000$300\begin{array}{lrrr} & \text { Dept.A } & \text { Dept. B } & \text { Dept. C } \\ \text { Sales } & \$ 6,000 & \$ 5,000 & 6,800 \\\text { Expenses } & & & \\\text { Avoidable } & 2,000 & 1,000 & 4,000 \\\text { Unavoidable } & 1,500 & 3,000 & 2,500 \\ \text { Total expenses } & 3,500 & 4,000 & 6,500 \\\text { Net income(loss) } & \$ 2,500 & \$ 1,000 & \$ 300\end{array}
Compute the change to the company's total net income if Dept.C is eliminated.


A) $300 decrease
B) $300 increase
C) $2,800 decrease
D) $2,800 increase
E) $6,800 decrease

Correct Answer:

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