Fabio Corporation is considering eliminating a department that has a contribution margin of $30,000 and $60,000 in

Question:

Fabio is considering eliminating a department that has a of $30,000 and $60,000 in fixed costs. Of the fixed costs, $15,000 cannot be avoided. The effect of eliminating this department on Fabio's overall net operating income would be:
A. A decrease of $30,000.
B. An increase of $30,000.
C. A decrease of $15,000.
D. An increase of $15,000.
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...