Consumer division is eliminated

Assignment Help Financial Accounting

Reference no: EM13791708

The following information relates to next year's projected operating results of the Consumer Division of Xampa Corporation:

Contribution Margin...... $1,800,000

Fixed expenses............ 2,100,000

Net Operating Loss........$(300,000)

If the Consumer Division were eliminated, $1,600,000 of the above fixed expenses could be avoided. What will be the effect on Xampa's profit next year if Consumer Division is eliminated?

A. $200,000 increase

B. $300,000 increase

C. $300,000 decrease

D. $200,000 decrease.

Reference no: EM13791708

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