Donnelly Company has three products, R2, R4, and R2D2. The following information is available: Product R2 Product R4 Product R2D2 Sales $30,000 $45,000 $12,000 Variable Costs 18,000 24,000 7,500 Contribution Margin 12,000 21,000 4,500 Fixed Costs: Avoidable 4,500 9,000 3,000 Unavoidable 3,000 4,500 2,700 Operating Income $4,500 $7,500 $(1,200) Donnelly Company is thinking of dropping Product R2D2 because it is reporting a loss. Assuming Donnelly drops Product R2D2 and does not replace it, what will happen to operating income?

Rings Company has three product lines, A, B, and C. The following financial information is available:   Item Product Line A Product Line B Product Line C Sales $ 66,000 $ 135,000 $ 30,000 Variable costs $ 39,600 $ 72,000 $ 18,750 Contribution margin $ 26,400 $ 63,000 $ 11,250 Fixed costs:       Avoidable $ 6,100 $ 18,000 $ 8,400 Unavoidable $ 4,800 $ 13,500 $ 3,800 Pre-tax operating income $ 15,500 $ 31,500 $ (950)   If Product Line C is discontinued and the manufacturing space formerly devoted to this line is rented for $6,000 per year, pre-tax operating income for the company will likely:   Multiple Choice   Be unchanged—the two effects cancel each other out.   Increase by $1,950.   Increase by $3,150.   Increase by $5,850.   Increase by some other amount.

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The following information is for Bullwinkle Industries Inc.: Line Item Description East West Sales volume (units):     Product Alpha 45,000 38,000 Product Omega 60,000 50,000 Sales price:     Product Alpha $500 $600 Product Omega $250 $225 Variable cost per unit:     Product Alpha $275 $275 Product Omega $140 $140 a.   Determine the contribution margin for the East Region and West Region.East Region: fill in the blank 1 of 2$West Region: fill in the blank 2 of 2$ b.   Determine the contribution margin ratio for the East Region and West Region. Round the contribution margin ratio to one-tenth of a percent.East Region: fill in the blank 1 of 2%West Region: fill in the blank 2 of 2%