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A company has two different products that are sold in different markets. Financial data are as follows: Product A Product B Total Revenue $16,000 $9,400

A company has two different products that are sold in different markets. Financial data are as follows:

Product A

Product B

Total

Revenue

$16,000

$9,400

$25,400

Variable cost

(9,000)

(9,900)

(18,900)

Fixed cost (allocated)

(3,000)

(2,100)

(5,100)

Operating

$3,000

($2,600)

$1,400

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 $2,100

b. Increases by $500

c. Decreases by $2,100

d. Decreases by $500

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