5. Denly Company has three products, A, B, and C. The following information is available: Product A Product B Product C Sales $60,000 $90,000 $24,000 Variable costs 36,000 48,000 15,000 Contribution margin 24,000 42,000 9,000 Fixed costs: Avoidable 9,000 18,000 6,000 Unavoidable 6,000 9,000 5,400 Operating income $ 9,000 $15,000 $ (2,400)i. Denly Company is thinking of dropping Product C because it is reporting a loss. Assuming Denly drops Product C and does not replace it, operating income will be?ii. Assuming Product C is discontinued and the space formerly used to produce Product C is rented for $12,000 per year, operating income will be?

5. Denly Company has three products, A, B, and C. The following information is available: Sales Product A Product B Product C Variable costs $60,000 $90,000 $24,000 Contribution margin 36,000 48,000 15,000 Fixed costs: 24,000 42,000 9,000 - Avoidable 9,000 18,000 Unavoidable 6,000 - 6,000 9,000 Operating income 5,400 $ 9,000 $15,000 $ (2,400) i. Denly Company is thinking of dropping Product C because it is reporting a loss. Assuming Denly drops Product C and does not replace it, operating income will be? i. Assuming Product C is discontinued and the space formerly used to produce Product C is rented for $12,000 per year, operating income will be