Central Industries has three product lines: A, B, and C. The information givenbelow is available. Central Industries is thinking about dropping Product Cbecause it is reporting a loss. Assume Central Industries drops Product CPand does not replace it. What will happen to operating incomeSalesVariable costsContribution marginAvoidable fixed costsUnavoidable fixed costsOperating income(loss)Product A$100,00076,00024,0009,0006.000$9.000Product B$90,00048.00042,00018,0009,000$15.000Product C$44,00035,0009,0003,0007.700$(1.700)increase by $600increase by $1,700decrease by S6,000decrease by S9,000 ()increase by $2,400 ()

We know that under marginal costing Profit = Sales Revenue - Total Variable cost - Total Fixed…

Central Industries has three product lines: A, B, and C. The information given below is available. Central Industries is thinking about dropping Product C because it is reporting a loss. Assume Central Industries drops Product C ?and does not replace it. What will happen to operating income Product A $100,000 76,000 24,000 9,000 6,000 $9.000 Product B $90,000 48.000 42,000 18,000 9.000 $15.000 Product C $44,000 35,000 9,000 3,000 7,700 $(1.700) Sales Variable costs Contribution margin Avoidable fixed costs Unavoidable fixed costs Operating income(loss) increase by $600 O increase by $1,700 ) decrease by $6,000 decrease by $9,000 O increase by $2,400 O

Central Industries has three product lines: A, B, and C. The information given below is available. Central Industries is thinking about dropping Product C because it is reporting a loss. Assume Central Industries drops Product C ?and does not replace it. What will happen to operating income Product A $100,000 76,000 24,000 9,000 6,000 $9.000 Product B $90,000 48.000 42,000 18,000 9.000 $15.000 Product C $44,000 35,000 9,000 3,000 7,700 $(1.700) Sales Variable costs Contribution margin Avoidable fixed costs Unavoidable fixed costs Operating income(loss) increase by $600 O increase by $1,700 ) decrease by $6,000 decrease by $9,000 O increase by $2,400 O

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 6E

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