A company has two different products that are sold in different markets. Financial data are as follows:
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A company has two different products that are sold in different markets. Financial data are as follows:
| Product A | Product B | Total |
Revenue | $16,000 | $9,400 | $25,400 |
Variable cost | (9,000) | (9,900) | (18,900) |
Fixed cost (allocated) | (3,000) | (2,100) | (5,100) |
Operating | $3,000 | ($2,600) | $1,400 |
Assume that fixed costs are all unavoidable and that dropping one product would not impact sales of the other. If product B is dropped what would be the impact on total operating income of the company?
a. Increases by $2,100
b. Increases by $500
c. Decreases by $2,100
d. Decreases by $500
Related Book For
Project Management A Systems Approach to Planning Scheduling and Controlling
ISBN: 978-0470278703
10th Edition
Authors: Harold Kerzner
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