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Richardson Company manufactures two products. Both products have the same sales price, and the volume of sales is equivalent. However, due to the difference
Richardson 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 considering dropping Product B because that product line has an operating loss. (Click the icon to view the income statement.) 9. If fixed costs cannot be avoided, should Richardson drop Product B? Why or why not? 10. If 50% of Product B's fixed costs are avoidable, should Richardson drop Product B? Why or why not? 9. If fixed costs cannot be avoided, should Richardson drop Product B? Why or why not? (Use a minus sign or parentheses to enter a decrease in profits.) Expected decrease in revenue Data table Expected decrease in total variable costs Expected increase/(decrease) in operating income Richardson Company Income Statement Month Ended June 30, 2024 Total Product A Product B Net Sales Revenue $ 160,000 $ 80,000 $ 80,000 132,000 66,800 65,200 Variable Costs Contribution Margin 28,000 13,200 14,800 35,000 3,500 31,500 Fixed Costs $ (7,000) $ 9,700 $ (16,700) Operating Income/(Loss) Print Done
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