Acompany has two different products that are sold in different markets. financial data are as follows: product a product b total revenue $15,000 $9,400 $24,400 variable cost (7,000) (9,800) (16,800) fixed cost (allocated) (3,000) (2,100) (5,100) operating income (loss) $5,000 $(2,500) $2,500 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?

Operating Income of the Company will increase by $400

Explanation:

Financial Data without Product B:

Revenue                                       $15,000  

Variable Cost                               $(7,000)

Fixed Cost (Allocated)               $(5,100)

Operating Income / (Loss)        $2,900  

So,

Operating Income without Product B           $2,900  

Operating Income with both Products          $2,500  

Difference                                                        $400  

Based on the assumption that fixed costs are all unavoidable, if Product B is dropped, total fixed costs will be allocated to Product A. Moreover, revenue and variable costs of Product A are not impacted by dropping Product B.

Therefore, Operating Income of the company will increase by $400, if Product B is dropped.

*Please note that figure in brackets represent negative values.

answer: b) the us is the leading importer but not the leading exporter.

extra info:

the u.s is the largest importer but it is not the largest exporter as china sits on the top of the table when it comes to leading exporters.

but u.s is not far from first,

they rank in 2nd globally as the worlds largest exporter.

happy to

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answer; the correct answer should be (demonstrations); good luck