Multiple Choice
Jerry Enterprises is considering whether to discontinue a division that generates a total contribution margin of $65,000 per year.Fixed manufacturing overhead allocated to this division is $50,000,of which 18,000 is unavoidable.If Jerry Enterprises were to eliminate this division,the effect on the company's operating income would be a (n)
A) increase in total operating income of $33,000.
B) decrease in total operating income of $33,000.
C) increase in total operating income of $47,000.
D) decrease in total operating income of $47,000.
Correct Answer:
Verified
Correct Answer:
Verified
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