Indirect expenses allocated


One Department in a company had a contribution margin of $15,000 and a net loss from operations of $2,000. The indirect expenses allocated to this department would have been incurred whether or not the department existed. If this department had been eliminated, the company's reported net income would have been:

a)$2,000 higher

b)$15,000 lower

c)$13,000 lower

d)the same with or without the department

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Accounting Basics: Indirect expenses allocated
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