10. Industries has three product lines: X, Y and Z. The following information is available: Product...

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10. Industries has three product lines: X, Y and Z. The following information is available: Product X Product Y Product Z Sales $100,000 $70,000 $44,000 Variable costs 76,000 48,000 30,000 24,000 22,000 14,000 Contribution margin Avoidable fixed costs 9,000 18,000 3,000 Unavoidable fixed costs 6,000 6,000 7,700 Operating income(loss) $9,000 $(2,000) $3,300 Industries is thinking about dropping Product Y because it is reporting a loss. Assume Industries drops Product Y and does not replace it. What will happen to operating income? A) increase by $2,000 B) increase by $22,000 C) decrease by $4,000 D) decrease by $18,000 10. Industries has three product lines: X, Y and Z. The following information is available: Product X Product Y Product Z Sales $100,000 $70,000 $44,000 Variable costs 76,000 48,000 30,000 24,000 22,000 14,000 Contribution margin Avoidable fixed costs 9,000 18,000 3,000 Unavoidable fixed costs 6,000 6,000 7,700 Operating income(loss) $9,000 $(2,000) $3,300 Industries is thinking about dropping Product Y because it is reporting a loss. Assume Industries drops Product Y and does not replace it. What will happen to operating income? A) increase by $2,000 B) increase by $22,000 C) decrease by $4,000 D) decrease by $18,000

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If the Product Y is Dropped Decrease in Contribution ... View the full answer