8) Ahmet Company has three products, A, B, and C. The following information is available: A B с Sales Variable costs Contribution margin Fixed costs: Avoidable Unavoidable Operating income $70,000 37,000 33,000 10,000 7.000 $16,000 $97,000 51.000 46,000 20,000 12,000 $14.000 $23,000 15,000 8,000 2,000 9.400 $ (3,400) Ahmet Company is thinking of dropping Product C because it is reporting a loss. Assuming Ahmet drops Product C and does NOT replace it, operating income will A) increase by $3,400 B) increase by $2,000 C) decrease by $6,000 D) decrease by $11,400

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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8) Ahmet Company has three products, A, B, and C. The following information is available:
A
B
с
Sales
Variable costs
Contribution margin
Fixed costs:
Avoidable
Unavoidable
Operating income
$70,000
37,000
33,000
10,000
7.000
$16,000
$97,000
51.000
46,000
20,000
12,000
$14.000
$23,000
15,000
8,000
2,000
9.400
$ (3,400)
Ahmet Company is thinking of dropping Product C because it is reporting a loss. Assuming Ahmet drops Product C
and does NOT replace it, operating income will
A) increase by $3,400
B) increase by $2,000
C) decrease by $6,000 D) decrease by $11,400
Transcribed Image Text:8) Ahmet Company has three products, A, B, and C. The following information is available: A B с Sales Variable costs Contribution margin Fixed costs: Avoidable Unavoidable Operating income $70,000 37,000 33,000 10,000 7.000 $16,000 $97,000 51.000 46,000 20,000 12,000 $14.000 $23,000 15,000 8,000 2,000 9.400 $ (3,400) Ahmet Company is thinking of dropping Product C because it is reporting a loss. Assuming Ahmet drops Product C and does NOT replace it, operating income will A) increase by $3,400 B) increase by $2,000 C) decrease by $6,000 D) decrease by $11,400
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