help in homework

New User?

Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / Manor Company plans to discontinue a department that has a contribution margin of $24,000 and $48,000 in fixed costs

Manor Company plans to discontinue a department that has a contribution margin of $24,000 and $48,000 in fixed costs

Accounting

Manor Company plans to discontinue a department that has a contribution margin of $24,000 and $48,000 in fixed costs. Of the fixed costs, $21,000 cannot be avoided. What would be the effect of discontinuing the department on Manor's overall operating income?

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

Computation of the effect of discontinuing the department on Manor's overall operating income:-

The effect of discontinuing the overall operating income = (Fixed costs - Avoidable fixed costs) - Contribution margin

= ($48,000 - $21,000) - $24,000

= $3,000 (Increase)

Sitejabber (5.0)

BBC (5.0)

Trustpilot (4.9)

Google (5.0)