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Consider the following portion of a segmented income statement for the year ended December 31,...

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Accounting

Consider the following portion of a segmented income statement for the year ended December 31, 2018. Assume that the fixed expenses of Division KCF include $30,000 of direct fixed expenses and that the discontinuance of the department will not affect the sales of the other departments.

Division KCF:

Net Sales

$ 100,000

Prime Cost

35,000

Variable OH

25,000

Fixed OH

50,000

What would be the effect on the firms Operating Income if Division KCF were discontinued

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