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(Click the icon to view the income statement) McCollum Company manufactures two products. Both products have the same sales price, and the volume of sales
(Click the icon to view the income statement) McCollum Company manufactures two products. Both products have the same sales price, and the volume of sales is equivalent. However, due to the difference in production processes, Product A has higher variable costs and Product B has higher fixed costs. Management is considering dropping Product B because that product line has an operating loss, 9. 10. If fixed costs cannot be avoided, should McCollum drop Product B? Why or why not? 50% of Product B's fixed costs are avoidable, should McCollum drop Product B? Why or why not? 9. If fixed costs cannot be avoided, should McCollur drop Product B? Why or why not? (Use a minus sign or parentheses to enter a decrease in profits.) i Data Table Expected decrease in revenue Expected decrease in total variable costs Expected increase/(decrease) in operating income McCollum drop Product B because operating incorno will 10. If 50% of Product B's fixed costs are avoidable, should McCollum drop Product B? Why or why not? (Use a minus sign or parentheses to enter a decre Expected decrease in revenue Expected decrease in total variable costs McCollum Company Income Statement Month Ended June 30, 2018 Total Product Product B Net Sales Revenue S 150,000 S 75,000 $ 75,000 Variable Costa 90,000 55,000 35,000 Contribution Margin 60,000 20,000 40,000 Fixed Coats 50,000 5,000 45,000 S Operating Income (Loss) 10,000 $ 15,000 $ (5,000) Expected decrease in fixed costs Expected decrease in total costs Expected increase/(decrease) in operating income McCollum drop Product B because operating income will Print Done Enter any number in the edit fields and then continue to the next
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