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. If fixed costs cannot be avoided, should Mccollum drop Product B? Why or why not? (Use a minus sign or parentheses to enter a decrease in profits.) Expected decrease in revenue Expected decrease in total variable costs Expected increase/(decrease) in operating income Mccollum drop Product B because operating income will10. 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 decrease in profits.) Expected decrease in revenue Expected decrease in total variable costs Expected decrease in fixed costs Expected decrease in total costs Expected increase/(decrease) in operating income Mccollum drop Product B because operating income willMccollum Company Income Statement Month Ended June 30, 2018 Total Product A Product B Net Sales Revenue 150,000 $ 75,000 $ 75,000 Variable Costs 90,000 55,000 35,000 Contribution Margin 60,000 20,000 40,000 Fixed Costs 50,000 5,000 45,000 Operating Income/(Loss) S 10,000 $ 15,000 $ (5,000)