Question
A company has two different products that are sold in different markets. Financial data are as follows: Revenue Variable cost Fixed cost (allocated) Operating
A company has two different products that are sold in different markets. Financial data are as follows: Revenue Variable cost Fixed cost (allocated) Operating income (loss) Product A $17,000 (7,000) (1,000) $9,000 Product B $9,400 (9,900) (2,200) $(2,700) Total $26,400 (16,900) (3,200) $6,300 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?
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Management and Cost Accounting
Authors: Colin Drury
8th edition
978-1408041802, 1408041804, 978-1408048566, 1408048566, 978-1408093887
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