question 16

Question 16 (3 points) Jarvis, Inc. has three product lines-X, Y, and Z. The following information is available: Z Sales revenue he Variable costs Contribution margin Fixed costs Operating income Kloss) XY $90,000 $60,000 $30,000 (30,000) (15.000) (12.000) $60,000 $45,000 $18,000 (20.000) (15,000) (23,000) $40,000 $30,000 $(5000) The company is deciding whether to drop product line Z because it has an operating loss. Assuming fixed costs are unavoidable, if Jarvis drops product line Z and rents the space formerly used to produce product Z for $20,000 per year, total operating income will be $23,000 $18,000 O $67.000 $12,000