ccC Company produces and sells 8,000 units of Product C each year. Each unit of product sells for P10 and has a contribution margin of P6. It is estimated that if the product is discontinued, P50,000 of the P60,000 in fixed costs charged to the product could be eliminated. These data indicate that if the product is discontinued, overall company operating income should: O Increase by P2,000 per year O Decrease by P2,000 per year Increace by D38.000 per vear

ccC Company produces and sells 8,000 units of Product C each year. Each unit of product sells for P10 and has a contribution margin of P6. It is estimated that if the product is discontinued, P50,000 of the P60,000 in fixed costs charged to the product could be eliminated. These data indicate that if the product is discontinued, overall company operating income should: O Increase by P2,000 per year O Decrease by P2,000 per year Increace by D38.000 per vear

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

CCC Company produces and sells 8,000 units of Product C each year. Each unit of product sells for P10 and has a contribution margin of P6. It is estimated that if the product is discontinued, P50,000 of the P60,000 in fixed costs charged to the product could be eliminated. These data indicate that if the product is discontinued, overall company operating income should:

- Increase by P2,000 per year
- Decrease by P2,000 per year
- Increase by P38,000 per year
- Decrease by P38,000 per year

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