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What lucy overall net operating profit would

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Reference no: EM132541895

A study has been conducted to determine if one of the departments of Lucy Company should be discontinued. The contribution margin in the department is £100,000 per year. Fixed costs charged to the department are £130,000 per year. It is estimated that £ 80,000 of these fixed costs could be eliminated if the department is discontinued.

Question 1: These data indicate that if the department is discontinued, Lucy's overall net operating profit would:

Option A. decrease by £20,000 per year

Option B. increase by £50,000 per year

Option C. increase by £30,000 per year

Option D. decrease by £50,000 per year

Reference no: EM132541895

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