Granfield company is considering eliminating

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Granfield Company is considering eliminating its backpack division, which reported an operating loss for the recent year of $42,200. The division sales for the year were $963,800 and the variable costs were $477,000. The fixed costs of the division were $529,000. If the backpack division is dropped, 40% of the fixed costs allocated to that division could be eliminated. The impact on Granfield's operating income for eliminating this business segment would be:

Answers:

$275,200 increase
$486,800 decrease
$211,600 increase
$275,200 decrease
$486,800 increase

Reference no: EM131023095

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