If the department is discontinued, what would be the annual change in the company's overall net operating?
A study has been conducted to determine if one of the departments in Your Company should be discontinued. The contribution margin in the department is $50,000 per year. Fixed expenses charged to the department are $65,000 per year. It is estimated that $40,000 of these fixed expenses could be eliminated if the department is discontinued. Discontinuing this product would result in a $120,000 increase in the contribution margin of other product lines. If the department is discontinued, what would be the annual change in the company's overall net operating? It the change is a decrease, enter your number with a – in front. Otherwise, just enter the number.
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