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Granfield Company is considering eliminating its backpack division, which reported an operating loss for the...

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Accounting

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Granfield Company is considering eliminating its backpack division, which reported an operating loss for the recent year of $41,000. The division sales for the year were $941,000 and the variable costs were $465,000. The fixed costs of the division were $517,000. 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 O $269,200 increase O $476,000 decrease O $206,800 increase O $269,200 decrease O $476,000 increase

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