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

Answer rating: 100% (QA)

B Increases by 500 1 Financila Data if Product B is dropped Product A R... View the full answer