Cesar Company has three product lines: A, B and C. The information given below is available. Assume Cesar Company drops Product C. Cesar Company then doubles the production and sales of Product B without ?increasing fixed costs. What will happen to operating income Product B $90,000 48,000 42,000 18,000 9,000 $15.000 Product C Product A $100,000 76,000 24,000 9,000 $44,000 35,000 9,000 3,000 Sales Variable costs Contribution margin Avoidable fixed costs 7,700 $(1.700) Unavoidable fxed costs 6,000 $9.000 Operating income(loss) increase by $42,000 O increase by $18,000 increase by $36,000 O increase by $15,000 O increase by $24,000 O
Cesar Company has three product lines: A, B and C. The information given below is available. Assume Cesar Company drops Product C. Cesar Company then doubles the production and sales of Product B without ?increasing fixed costs. What will happen to operating income Product B $90,000 48,000 42,000 18,000 9,000 $15.000 Product C Product A $100,000 76,000 24,000 9,000 $44,000 35,000 9,000 3,000 Sales Variable costs Contribution margin Avoidable fixed costs 7,700 $(1.700) Unavoidable fxed costs 6,000 $9.000 Operating income(loss) increase by $42,000 O increase by $18,000 increase by $36,000 O increase by $15,000 O increase by $24,000 O
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 1MC: The amount of a units sales price that helps to cover fixed expenses is its ____________________. A....
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