Ahmet Company has three products, A, B, and C. The following information is available: A B...

 

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Ahmet Company has three products, A, B, and C. The following information is available: A B Sales $70,000 $97,000 C $23,000 Variable costs 37.000 51.000 15.000 Contribution margin 33,000 46,000 8,000 Fixed costs: Avoidable 10,000 20,000 2,000 Unavoidable 7.000 12,000 9.400 Operating income $16,000 $14,000 $(3,400) Ahmet Company is thinking of dropping Product C because it is reporting a loss. Assuming Ahmet drops Product C and does NOT replace it, operating income will A) increase by $3,400 B) increase by $2,000 C) decrease by $6,000 D) decrease by $11,400 Ahmet Company has three products, A, B, and C. The following information is available: A B Sales $70,000 $97,000 C $23,000 Variable costs 37.000 51.000 15.000 Contribution margin 33,000 46,000 8,000 Fixed costs: Avoidable 10,000 20,000 2,000 Unavoidable 7.000 12,000 9.400 Operating income $16,000 $14,000 $(3,400) Ahmet Company is thinking of dropping Product C because it is reporting a loss. Assuming Ahmet drops Product C and does NOT replace it, operating income will A) increase by $3,400 B) increase by $2,000 C) decrease by $6,000 D) decrease by $11,400

Answer rating: 100% (QA)

To determine the impact on operating income if Ahmet Company drops Product C and does not replace it ... View the full answer