Question: Rambo Company has three products, A, B, and C. The following information is available: Product A Product B Product C Sales $60,000 $90,000 $24,000 Variable

Rambo Company has three products, A, B, and C. The following information is available:

Product AProduct BProduct C

Sales $60,000 $90,000 $24,000

Variable costs36,00048,00015,000

Contribution margin 24,000 42,000 9,000

Fixed costs:

Avoidable 6,000 15,000 4,000

Unavoidable7,0009,0005,400

Operating income $ 11,000 $18,000 $ (400)

Rambo Company is thinking of dropping Product C because it is reporting a loss. Assuming Rambo drops Product C and does NOT replace it, operating income will:

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