The effect on a company's operating income of discontinuing a department with a contribution margin of $8,000

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The effect on a company's operating income of discontinuing a department with a contribution margin of $8,000 and allocated overhead of $16,000 (of which $7,000 cannot be eliminated would be to :

A. Decrease operating income by $9,000

B. Decrease Operating Income by $1,000

C. Increase operating income by $8,000

D. Decrease operating income by $8,000

E. Increase Operating income by $1,000

Related Book For answer-question

Fundamentals of Cost Accounting

ISBN: 978-0077398194

3rd Edition

Authors: William Lanen, Shannon Anderson, Michael Maher

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Posted Date: Feb 06, 2024 05:56 AM

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The effect on a company's operating income of discontinuing a department with a contribution margin of $8,000

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Fundamentals of Cost Accounting

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