Company total net operating income

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Reference no: EM13135599

A study has been conducted to determine if one of the departments in Parry Company should be discontinued. The contribution margin in the department is $50,200 per year. Fixed expenses charged to the department are $65,300 per year. It is estimated that $38,400 of these fixed expenses could be eliminated if the department is discontinued. These data indicate that if the department is discontinued, the company's overall net operating income would:

a) increase by $26,900 per year

b) decrease by $26,900 per year

c) increase by $11,800 per year

d) decrease by $11,800 per year

Reference no: EM13135599

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