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46. (6 points) Tri Company has three products: A, B, and C. The following financial information is available: Prod A Sales $ 36,000 Prod
46. (6 points) Tri Company has three products: A, B, and C. The following financial information is available: Prod A Sales $ 36,000 Prod B $ 60,000 Prod C $ 15,000 Variable costs $ 21,600 $ 32,000 $ 9,375 Contribution margin $ 14,400 $ 28,000 $ 5,625 Fixed costs: Avoidable $ 4,600 $ 10,500 Unavoidable $3,300 $ 6,000 $ 3,900 $2,300 Operating income $ 6,500 $ 11,500 $ (575) a. Management is considering dropping Product C because it is reporting an operating loss. Calculate Tri Co.'s new Operating Income if Product C is dropped and is not replaced. b. Based on your analysis above, should Tri Co. drop Product C? Why or why not?
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