Quiz Company provided the following information related to its two product lines Product 1 Product 2...

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Quiz Company provided the following information related to its two product lines Product 1 Product 2 10,000 20,000 Units sold Price per unit $20 $15 Variable cost per unit 10 12 Direct fixed costs 35,000 75,000 Common foxed costs total $45.000. Quiz Company allocated 1/3 of the common fixed costs to Product 1 and 2/3 of the common fixed costs to Product 2. All direct fixed costs will be avoidable if a product line is dropped Assume that Product 1 and Product 2 are complements so that it Product 2 is dropped sales of Product 1 will decrease 10% Determine the amount that total operating income will increase (decrease) if Product 2 is dropped Note: Give your answer using dollar signs and commas but no decimal points (cents) Express negative numbers in parentheses Example $12,345 or $(12,345) Quiz Company provided the following information related to its two product lines Product 1 Product 2 10,000 20,000 Units sold Price per unit $20 $15 Variable cost per unit 10 12 Direct fixed costs 35,000 75,000 Common foxed costs total $45.000. Quiz Company allocated 1/3 of the common fixed costs to Product 1 and 2/3 of the common fixed costs to Product 2. All direct fixed costs will be avoidable if a product line is dropped Assume that Product 1 and Product 2 are complements so that it Product 2 is dropped sales of Product 1 will decrease 10% Determine the amount that total operating income will increase (decrease) if Product 2 is dropped Note: Give your answer using dollar signs and commas but no decimal points (cents) Express negative numbers in parentheses Example $12,345 or $(12,345)

Answer rating: 100% (QA)

Change in Operating Income Increase in operat... View the full answer