ABC company produces and sells units of product D The selling price of product D is $ per unit, and the variable expense is $ per unit. Further investigation has revealed that $ of the $ in fixed expenses charged to Product D would NOT be avoidable even if the product was discontinued.

Instructions:

a Prepare the contribution income statement for the company: if the firm keeps the product D marks; if the firm drops product D marks

b What would be the effect on the company\'s overall net operating income if product D was dropped? marks

c Should the company keep or drop product D marks