FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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)
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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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