Business, 22.04.2021 01:00 briarkaltvedt
A company has two different products that are sold in different markets. Financial data are as follows:
Product A
Product B
Total
Revenue
$16,000
$9,300
$25,300
Variable cost
(8,000)
(9,800)
(17,800)
Fixed cost (allocated)
(2,000)
(2,100)
(4,100)
Operating income (loss)
$6,000
$(2,600)
$3,400
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.
decreases by $2,100
B.
increases by $500
C.
increases by $2,100
D.
decreases by $500
Answers: 3
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