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A company produces and sells three products, C, J & P. The most recent results of the product lines are shown below, for the last

A company produces and sells three products, C, J & P. The most recent results of the product lines are shown below, for the last year.

C J P
Sales $200,287 $151,634 $125,222
Variable costs $95,441 $74,034 $50,811
Fixed Costs $63,267 $72,712 $65,893

Assume that if a product is dropped, the fixed costs of that product line will be reduced by 70%.

Management is contemplating dropping product J. Compute operating income for all three products. Then compute operating income after dropping product J.

READ THIS CAREFULLY:

Enter the difference between the old and new operating income. If operating income goes down after dropping J, enter a negative sign in front of your number. So for example if income drops by 3334, enter -3334 as your answer.

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