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31) Beta has three products, A, B, and C. The following information is available: C $24,000 9,000 Product A $18,000 Product B Sales $60,000 $90,000 Variable costs 36.000 48,000 15,000 Contribution margin 24,000 42,000 Fixed costs: Avoidable Unavoidable Operating income $ (400) Product 6,000 7.000 15,000 4,000 9.000 5.400 $11,000 Beta is thinking of dropping Product C because it is reporting a loss. Assuming it drops Product C and does NOT replace it, what will be the effect on operating income? (please list dollar value and the direction of the change in operating income)

31) Beta has three products, A, B, and C. The following information is available: C $24,000 9,000 Product A $18,000 Product B Sales $60,000 $90,000 Variable costs 36.000 48,000 15,000 Contribution margin 24,000 42,000 Fixed costs: Avoidable Unavoidable Operating income $ (400) Product 6,000 7.000 15,000 4,000 9.000 5.400 $11,000 Beta is thinking of dropping Product C because it is reporting a loss. Assuming it drops Product C and does NOT replace it, what will be the effect on operating income? (please list dollar value and the direction of the change in operating income)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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31) Beta has three products, A, B, and C. The following information is available: C $24,000 9,000 Product A Product B $18,000 $90,000 Variable costs 36,000 48,000 15,000 Contribution margin 24,000 42,000 Sales $60,000 Fixed costs: Avoidable 6,000 Unavoidable 7,000 Product Operating income $ (400) 15,000 4,000 9,000 5.400 $ 11,000 Beta is thinking of dropping Product C because it is reporting a loss. Assuming it drops Product C and does NOT replace it, what will be the effect on operating income? (please list dollar value and the direction of the change in operating income)
Transcribed Image Text:31) Beta has three products, A, B, and C. The following information is available: C $24,000 9,000 Product A Product B $18,000 $90,000 Variable costs 36,000 48,000 15,000 Contribution margin 24,000 42,000 Sales $60,000 Fixed costs: Avoidable 6,000 Unavoidable 7,000 Product Operating income $ (400) 15,000 4,000 9,000 5.400 $ 11,000 Beta is thinking of dropping Product C because it is reporting a loss. Assuming it drops Product C and does NOT replace it, what will be the effect on operating income? (please list dollar value and the direction of the change in operating income)
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