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The following information relates to next year's projected operating results of the Aluminum
Division of Wroclaw Corporation:
Contribution margin...................... $1,500,000
Fixed expenses.............................. (1,700,000)
Net operating
$(200,000)
loss..........................
If Aluminum Division is dropped, $1,000,000 of the above fixed expenses would be eliminated.
What will be the effect on Wroclaw's profit next year if Aluminum Division is dropped instead of
being kept?
A) $500,000 decrease
B) $800,000 increase
C) $1,000,000 increase
D) $1,200,000 increase
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Answer:-If Aluminum Division is dropped the Wroclaw’s profit will decrease next year by $…View
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