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Small Company has three products: A, B, and C. The following information is available: Product A Product B Product C $60,000 $98,000 $23,000 Sales Variable
Small Company has three products: A, B, and C. The following information is available: Product A Product B Product C $60,000 $98,000 $23,000 Sales Variable costs $38,000 $53,000 $12,000 Contribution margin $22,000 $45,000 $11,000 Fixed costs: Avoidable $6.000 $19,000 $5,000 Unavoidable $11,000 $12,000 $9,400 Operating income $5,000 $14,000 $(3,400) Small Company is thinking of dropping Product C because it is reporting a loss. Assuming Small drops Product C and does NOT replace it, operating income will: increase by $3,400. increase by $5,000. decrease by $6,000. decrease by $14,400
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