Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

10. Industries has three product lines: X, Y and Z. The following information is available: Product X Product Y Product Z Sales $100,000 $70,000

10. Industries has three product lines: X, Y and Z. The following information is available: Product X Product Y Product Z Sales $100,000 $70,000 $44,000 Variable costs 76,000 48,000 30,000 24,000 22,000 14,000 Contribution margin Avoidable fixed costs 9,000 18,000 3,000 Unavoidable fixed costs 6,000 6,000 7,700 Operating income(loss) $9,000 $(2,000) $3,300 Industries is thinking about dropping Product Y because it is reporting a loss. Assume Industries drops Product Y and does not replace it. What will happen to operating income? A) increase by $2,000 B) increase by $22,000 C) decrease by $4,000 D) decrease by $18,000

Step by Step Solution

3.44 Rating (151 Votes )

There are 3 Steps involved in it

Step: 1

If the Product Y is Dropped Decrease in Contribution ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management and Cost Accounting

Authors: Colin Drury

10th edition

1473748873, 9781473748910 , 1473748917, 978-1473748873

More Books

Students also viewed these Accounting questions

Question

Distinguish between nonsampling error and sampling error.

Answered: 1 week ago