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The effect on a company's operating income of discontinuing a department with a contribution margin of $17,000 and an allocated fixed cost of which...
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The effect on a company's operating income of discontinuing a department

with a contribution margin of $17,000 and an allocated fixed cost of which $14,000 cannot be eliminated would be:
a) increase operating income by $ 1000
b) decrease operating income by $18,000
c) cannot be determined
d) increase operating income by $ 18,000
e) decrease operating income by $1000

Step-by-step answer

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