Question
A company has two different products that are sold in different markets. Financial data are as? follows: Product A Product B Total Revenue $ 16
A company has two different products that are sold in different markets. Financial data are as? follows:
Product A | Product B | Total | |
Revenue | $ 16 comma 000$16,000 | $ 9 comma 400$9,400 | $ 25 comma 400$25,400 |
Variable cost | ?(7 comma 0007,000?) | ?(9 comma 9009,900?) | ?(16 comma 90016,900?) |
Fixed cost? (allocated) | ?(1 comma 0001,000?) | ?(2 comma 2002,200?) | ?(3 comma 2003,200?) |
Operating income? (loss) | $ 8 comma 000$8,000 | ?$(2 comma 7002,700?) | $ 5 comma 300$5,300 |
Assume that fixed costs of
$ 1 comma 000$1,000
could be eliminated if Product B was dropped. Assume furthermore 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?
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