Question

Granfield Company is considering eliminating its backpack division, which reported an operating loss for the recent year of $42,800. The division sales for the year were $975,200 and the variable costs were $483,000. The fixed costs of the division were $535,000. If the backpack division is dropped, 40% of the fixed costs allocated to that division could be eliminated. The impact on Granfield's operating income for eliminating this business segment would be: Multiple Choice $492,200 decrease $278,200 decrease $278,200 increase $492,200 increase $214,000 increase

Answer 1

Find the given attachment