Question
6 (10 marks) ABC Company has three product lines: Shoes, Purses and Gloves. The products have the following revenues and expenses: Sales Variable costs Traceable
6 (10 marks) ABC Company has three product lines: Shoes, Purses and Gloves. The products have the following revenues and expenses: Sales Variable costs Traceable fixed costs Allocated common costs Operating income (loss) Shoes Purses Gloves $ 1,900 $ 2,220 $ 2,560 760 890 960 320 370 760 420 520 2,020 $ 400 $ 440 $ (1.180) I If ABC Company dropped the Gloves product line, how much would the company's profit CHANGE? A) increase by $760 B) decrease by $1,180 C) increase by $1,280 D) increase by $840 E) decrease by $840 F) increase by $1,180 G) decrease by $1,800
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