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

Rings company has three product lines A, B and C. The following financial information is available:

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8.45 Petoskey Company produces three products: Alanson, Boyne, and Conway. A segmented income statement, with amounts given in thousands, follows:   Alanson Boyne Conway Total Sales revenue $1,280   $185   $300   $1,765   Less: Variable expenses 1,115   45   240   1,400   Contribution margin $165   $140   $60   $365   Less direct fixed expenses:                   Depreciation 50   15   10   75     Salaries 95   85   76   256   Segment margin $20   $40   $(26)   $34   Direct fixed expenses consist of depreciation and plant supervisory salaries. All depreciation on the equipment is dedicated to the product lines. None of the equipment can be sold. Assume that, each of the three products has a different supervisor whose position would be eliminated if the associated product were dropped. Assume that 20% of the Alanson customers choose to buy from Petoskey because it offers a full range of products, including Conway. If Conway were no longer available from Petoskey,…