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Income statements for the most recent period for each product line are presented below: Product A Product B Product C Sales $3,000 $900 $480
Income statements for the most recent period for each product line are presented below: Product A Product B Product C Sales $3,000 $900 $480 -Variable manufacturing costs -2,100 - 700 - 300 -Variable selling & admin. - 100 -30 -40 -Avoidable fixed costs - 550 -171 - 100 -Unavoidable fixed costs -100 -44 -45 =Net Operating income =$150 = -$45 =-$5 Units produced in one hour 35 47 22 By how much would total operating income change if product C was dropped?
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To determine the change in total operating income if Product C is droppedwe need to analyze the impact on both revenues and costs Revenue Product Cs sales contribute 480 to the total revenue If Produc...Get Instant Access to Expert-Tailored Solutions
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