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What will be the resulting operating income

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Question - Grace Sullivan & Company has two sales offices: one located in Portland and one in Portsmouth. The company's records report the following information's:

Portland           

Sales          $40,000                     

Direct costs:

Variable    15,000                 

Fixed        10,000       

Portsmouth

Sales: $50,000

Direct Cost:

Variable: $25,000

Fixed          10,000

Management is considering dropping the Portland office.

What will be the resulting operating income if Portland is eliminated and half of its fixed costs are avoidable?

Reference no: EM131750670

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