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Thompson Company manufactures two products. Both products have the same sales price, and the volume of sales is equivalent. However, due to the difference
Thompson 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. (Click the icon to view the income statement.) 9. If fixed costs cannot be avoided, should Thompson drop Product B? Why or why not? 10. If 50% of Product B's fixed costs are avoidable, should Thompson drop Product B? Why or why not? + 9. If fixed costs cannot be avoided, should Thompson 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 Thompson drop Product B because operating income will 10. If 50% of Product B's fixed costs are avoidable, should Thompson 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 will
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