(Answered) Question - grace sullivan amp company has two sales offices

Accounting

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?

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