Central Industries has three product lines: A, B, and C. The information given below is available. Central Industries is thinking about dropping Product C because it is reporting a loss. Assume Central Industries drops Product C ?and does not replace it. What will happen to operating income Product A $100,000 76,000 24,000 9,000 6,000 $9.000 Product B $90,000 48.000 42,000 18,000 9.000 $15.000 Product C $44,000 35,000 9,000 3,000 7,700 $(1.700) Sales Variable costs Contribution margin Avoidable fixed costs Unavoidable fixed costs Operating income(loss) increase by $600 O increase by $1,700 ) decrease by $6,000 decrease by $9,000 O increase by $2,400 O
Central Industries has three product lines: A, B, and C. The information given below is available. Central Industries is thinking about dropping Product C because it is reporting a loss. Assume Central Industries drops Product C ?and does not replace it. What will happen to operating income Product A $100,000 76,000 24,000 9,000 6,000 $9.000 Product B $90,000 48.000 42,000 18,000 9.000 $15.000 Product C $44,000 35,000 9,000 3,000 7,700 $(1.700) Sales Variable costs Contribution margin Avoidable fixed costs Unavoidable fixed costs Operating income(loss) increase by $600 O increase by $1,700 ) decrease by $6,000 decrease by $9,000 O increase by $2,400 O
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter12: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 1SEQ: Mario Company is considering discontinuing a product. The costs of the product consist of $20,000...
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Question
![Central Industries has three product lines: A, B, and C. The information given
below is available. Central Industries is thinking about dropping Product C
because it is reporting a loss. Assume Central Industries drops Product C
Pand does not replace it. What will happen to operating income
Sales
Variable costs
Contribution margin
Avoidable fixed costs
Unavoidable fixed costs
Operating income(loss)
Product A
$100,000
76,000
24,000
9,000
6.000
$9.000
Product B
$90,000
48.000
42,000
18,000
9,000
$15.000
Product C
$44,000
35,000
9,000
3,000
7.700
$(1.700)
increase by $600
increase by $1,700
decrease by S6,000
decrease by S9,000 ()
increase by $2,400 ()](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff8da78e7-a7b6-40f1-ab40-f50e3cf0cfef%2F1efa307d-dcae-48a5-94e5-3a8f0facc201%2Fcnq538s_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Central Industries has three product lines: A, B, and C. The information given
below is available. Central Industries is thinking about dropping Product C
because it is reporting a loss. Assume Central Industries drops Product C
Pand does not replace it. What will happen to operating income
Sales
Variable costs
Contribution margin
Avoidable fixed costs
Unavoidable fixed costs
Operating income(loss)
Product A
$100,000
76,000
24,000
9,000
6.000
$9.000
Product B
$90,000
48.000
42,000
18,000
9,000
$15.000
Product C
$44,000
35,000
9,000
3,000
7.700
$(1.700)
increase by $600
increase by $1,700
decrease by S6,000
decrease by S9,000 ()
increase by $2,400 ()
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