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Diamond Company has three product lines, A, B, and C. The following financial information is available Article Product Line A Product Line B product line

Diamond Company has three product lines, A, B, and C. The following financial information is available

ArticleProduct Line AProduct Line Bproduct line C
Sales$30,000$45,000$12,000
Variable costs$18,000$24,000$7,500
Contribution margin$12,000$21,000$4,500
Fixed costs:


Avoidable$4,500$9,000$3,000
Inevitable$3,000$4,500$2,000
operating income$4,500$7,500($500)


Diamond is considering dropping the C product line because it reports an operating loss. Assuming the company eliminates product line C and does not replace it, what will be the  company's operating income?


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