Question
A company has two different products that are sold in different markets. Financial data are as follows: Product A Product B Total Revenue $ 18
A company has two different products that are sold in different markets. Financial data are as follows: Product A Product B Total Revenue $ 18 comma 000 $ 9 comma 500 $ 27 comma 500 Variable cost (7 comma 000) (9 comma 700) (16 comma 700) Fixed cost (allocated) (3 comma 000) (2 comma 000) (5 comma 000) Operating income (loss) $ 8 comma 000 $(2 comma 200) $ 5 comma 800 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?
increases by $ 2 comma 000$2,000
B.
decreases by $ 200$200
C.
increases by $ 200$200
D.
decreases by $ 2 comma 000
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