Managerial Accounting
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The following information relates to next year's projected operating results of the Aluminum Division of Wroclaw Corporation:
Contribution margin 1,580,000
Fixed expenses 1,740,000
Net operating loss (160,000)
If Aluminum Division is dropped, 1,000,000 of the above fixed costs would be eliminated. What will be the effect on Wroclaw's profit next year if Aluminum Division is dropped instead of being kept?
840,000 increase
580,000 decrease
1,160,000 increase
1,000,000 increase
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Solution Summary
Solution contains calculations of effect on net income if company drops one product.
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