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Author Question: Giant Company has three products, A, B, and C. The following information is available: Product ... (Read 96 times)

Medesa

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Giant Company has three products, A, B, and C. The following information is available:

Product AProduct BProduct C
Sales$70,000$97,000$23,000
Variable costs37,00051,00015,000
Contribution margin33,00046,0008,000
 Fixed costs:
Avoidable10,00020,0002,000
Unavoidable7,00012,0009,400
Operating income$16,000$14,000$ (3,400)

Giant Company is thinking of dropping Product C because it is reporting a loss. Assuming Giant drops Product C and does NOT replace it, operating income will ________.
◦ increase by $3,400
◦ increase by $2,000
◦ decrease by $6,000
◦ decrease by $11,400


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Marked as best answer by Medesa on Mar 6, 2021

vkodali

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Medesa

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Reply 2 on: Mar 6, 2021
Excellent


xiazhe

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

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