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5) A company has two different products that are sold in different markets. Financial data are as follows: Product A Product B Total Revenue
5) A company has two different products that are sold in different markets. Financial data are as follows: Product A Product B Total Revenue $15,000 $9400 $24,400 Variable cost 7000 8800 15,800 Fixed cost (allocated) 3000 2100 5100 Operating income(loss) $5000 $(1500) $3500 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 $600 B) decreases by $600 C) decreases by $2100 D) decreases by $1500
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