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Johnson Corp produces 3 products: Product A, Product B, and Product C. A segmented income statement for the past year is provided below: Product A

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Johnson Corp produces 3 products: Product A, Product B, and Product C. A segmented income statement for the past year is provided below: Product A Product B Product C Total Sales 32,000 45,000 19,000 96,000 Variable Expenses 14,000 17,000 17,000 48,000 Contribution Margin 18,000 28,000 2,000 48,000 Direct Fixed Expenses: Supervisor Salaries 5,000 7,000 6,000 18,000 Depreciation 4,000 9,000 7,000 20,000 Segment Margin 9,000 12,000 (11,000) 10,000 The contribution rhargin for Product C is $2,000. The relevant fixed costs include $6,000 in supervision salaries. Depreciation and supervisor salaries are dedicated to the product lines. If a product is dropped, the company is able to eliminate the supervisor salaries for that product. None of the equipment being depreciated can be sold. Question 38 (1 point) Saved If product C is dropped operating income will: Stay the same Decrease and supervisor salaries are dedicated to the product lines. If a product is dropped, the company is able to eliminate the supervisor salaries for that product. None of the equipment being depreciated can be sold. Question 38 (1 point) Saved If product C is dropped operating income will: Stay the same Decrease Increase Saved Question 39 (3 points) What will be the change in operating income if Product C is dropped? Enter your answer as a positive number. 99 Question 40 (1 point) Saved Based on the change in operating income alone, should product C be dropped? (yes or no) Increase Saved Question 39 (3 points) What will be the change in operating income if Product C is dropped? Enter your answer as a positive number. Question 40 (1 point) Saved Based on the change in operating income alone, should product C be dropped? (yes or no) Yes O No Question 41 (1 point) Saved Now assume that product C is dropped and sales of Product A will increase by 50% with no change in the relevant direct fixed expenses. Operating income for the company will: Saved Question 41 (1 point) Now assume that product is dropped and sales of Product A will increase by 50% with no change in the relevant direct fixed expenses. Operating income for the company will: Decrease Increase Stay the same Question 42 (3 points) Assume that Product C is dropped and sales of Product A increase by 50%. What is the total increase or decrease in operating income. Enter your answer as a positive number A

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