CORRECT ANSWER C. PARKLIN’S OPERATING INCOME WILL GO FROM $500...
254.
Correct answer c. Parklin’s operating income will go from $500 to ($1,500) if Segment B is
closed, a decrease of $2,000.
Sales
$10,000
Variable cost of goods sold
4,000
Fixed cost of goods sold
2,500
(+$1,000 from Segment B)
Gross margin
3,500
Variable selling & admin.
2,000
Fixed selling & admin.
3,000
($1,500 from Segment B)
Operating loss
($1,500)