Multiple Choice
Gion Company is considering eliminating its windows division,which reported an operating loss for the recent year of $105,000.Division sales for the year were $1,110,000 and its variable costs were $975,000.The fixed costs of the division were $220,000.If the windows division is dropped,65% of the fixed costs allocated to it could be eliminated.The impact on Gion's operating income from eliminating this business segment would be:
A) $7,200 decrease
B) $8,000 increase
C) $143,000 decrease
D) $143,000 increase
E) $8,000 decrease
Correct Answer:
Verified
Correct Answer:
Verified
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