If this division is eliminated the fixed expenses will be, Ask an Expert

Accounting

North Division has the following information:

Sales $900,000
Variable expenses 480,000
Fixed expenses 465,000

If this division is eliminated, the fixed expenses will be allocated to the company's other divisions. What is the incremental effect on net income if the division is dropped?

a) $45,000 increase

b) $465,000 decrease

c) $420,000 decrease

d) $435,000 increase

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M964213

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