What is the effect on boris company as a whole

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Boris Company has multiple business units. Unit A has the following information: sales revenue is $200,000; variable expenses are $140,000; fixed expenses are $100,000. Fixed expenses - which are mostly represented by shared capacity costs (e.g., rent, depreciation, etc.) - are allocated evenly to the business units.

Question 1: What is the effect on Boris Company as a whole if Unit A is eliminated?

Total profit will increase by $40,000.

Total profit will decrease by $60,000.

Total profit will decrease by $40,000.

Total profit will not change.

Reference no: EM132520403

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