Rook Company sells video and board games. Below is last year's income statement for the board game segment: Sales $4,000,000 Variable expenses $2,600,000 Contribution margin $1,400,000 Fixed expenses $2,000,000 If the board game segment was discontinued, Rook Company could avoid $600,000 per year in fixed costs. The remainder of the fixed costs are not avoidable. If Rook were to discontinue this project line, by how much would net income increase or decrease?

Answer rating: 100% (QA)

To determine the change in net income if the board game segment is discontinued we need to compare t... View the full answer