Question
available: Product A Product B Product C Sales $60,000 $90,000 $24,000 Variable Costs $36,000 $48,000 $15,000 Contribution Margin $24,000 $42,000 $9,000 Fixed Costs: Avoidable
available: Product A Product B Product C Sales $60,000 $90,000 $24,000 Variable Costs $36,000 $48,000 $15,000 Contribution Margin $24,000 $42,000 $9,000 Fixed Costs: Avoidable $6,000 $15,000 $4,000 Unavoidable $7,000 $9,000 $5,400 Operating Income $11,000 $18,000 ($400) Rambo Company is thinking of dropping Product C because it is reporting a loss. Assuming Rambo drops Product C and does NOT replace it, operating income will O increase by $400 O increase by $4,000 O decrease by $5,000 decrease by $9,400
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