Question

A company has two different products that are sold in different markets. Financial data are as follows: Revenue Variable cost Fixed cost (allocated) Operating income (loss) Product A Product B Total $15,000 $9,400 $24,400 (9,000) (9,700) (18,700) (2,000) (2,200) (4,200) $4,000 $(2,500) $1,500 Assume that fixed costs are all unavoidable and that dropping one product would not impact sales of the other. If Product B is dropped, what would be the impact on total operating income of the company? A. increases by $2,200 B. decreases by $300 C. decreases by $2,200 D. increases by $300

          A company has two different products that are sold in different markets. Financial data are as follows:
Revenue
Variable cost
Fixed cost (allocated)
Operating income (loss)
Product A Product B
Total
$15,000
$9,400
$24,400
(9,000) (9,700) (18,700)
(2,000) (2,200) (4,200)
$4,000 $(2,500)
$1,500
Assume that fixed costs are all unavoidable and that dropping one product would not impact sales of the other. If Product B is dropped, what would be the impact on
total operating income of the company?
A. increases by $2,200
B. decreases by $300
C. decreases by $2,200
D. increases by $300

A company has two different products that are sold in different markets. Financial data are as follows:
Revenue
Variable cost
Fixed cost (allocated)
Operating income (loss)
Product A Product B
Total
15,0009,400
24,400
(9,000) (9,700) (18,700)
(2,000) (2,200) (4,200)4,000 (2,500)1,500
Assume that fixed costs are all unavoidable and that dropping one product would not impact sales of the other. If Product B is dropped, what would be the impact on
total operating income of the company?
A. increases by 2,200
B. decreases by300
C. decreases by 2,200
D. increases by300

Added by Jose Antonio S.

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