Reference no: EM13579754

The condensed income statement shows the following information for Department R: Sales, $2,000,000; Cost of Goods Sold, $1,200,000; Gross Profit, $800,000; Operating Expenses, $1,000,000; Loss from Operations, ($200,000). Assume that $360,000 of the cost of goods sold represent fixed factory overhead costs and $400,000 of the operating expenses are fixed costs. None of the fixed costs would change if Department R is eliminated. If Department R is discontinued, what would the effect on overall net income for the company be?