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Pumila Zinnia Company has two departments-Department A and Department B. The company's most recent contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Multiple Choice Total $ 800,000 320,000 480,000 400,000 $ 80,000 $(140,000) Department Department A B $450,000 200,000 230,000 250,000 140,000 260,000 $ 90,000 $ (10,000) The company says that $130,000 of the fixed expenses being charged to Department B are sunk costs or allocated costs that will continue if the segment is discontinued. However, if Department B is discontinued the sales in Department A will drop by 9%. What is the financial advantage (disadvantage) of discontinuing Department B? $ 350,000 120,000

Pumila Zinnia Company has two departments-Department A and Department B. The company's most recent contribution format income statement follows: The company says that $130,000 of the fixed expenses being charged to Department 8 are sunk costs or allocated costs that will continue if the segment is discontinued. Howevet, if Department B is discontinued the sales in Department A will drop by 9%. What is the financial advantage (disadvantage) of discontinuing Department B ? Muliple Choice 5040000 Pumila Zinnia Company has two departments-Department A and Department B. The company's most recent contribution format income statement follows: The company says that $130,000 of the fixed expenses being charged to Department 8 are sunk costs or allocated costs that will continue if the segment is discontinued. Howevet, if Department B is discontinued the sales in Department A will drop by 9%. What is the financial advantage (disadvantage) of discontinuing Department B ? Muliple Choice 5040000

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