The Company?s income statement for the upcoming year is as follows:

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 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.

Transcribed Image Text:

Sales Variable expenses Contribution margin Fixed expenses Operating loss $850,000 (520,000) $330,000 (480,000) ($150.000) Sales Variable expenses Contribution margin Fixed expenses Operating loss $850,000 (520,000) $330,000 (480,000) ($150.000)

Answer rating: 100% (QA)

Unavoidable fixed expe... View the full answer