Giant Company has firee products, A, B, and C. The following information is available Product A Product B ProductC Sales 567,000 590,000 53,000 521.000 Variable costs 40.000 11.000 Cantribution margin 27.000 37,000 10. 000 Fixod conts: Avoidetle 9,000 17,000 Unavoidable Operating income 4.000 7 400 S(1,400) 10,000 10,000 S8,000 510,000 Glant Company is thinking of dropping Product C because it is reporting a loss. Assuming Giant drops Praduct C and does NOT replace it operating income wil O A. Incraasa by $1.400 OB. increase by 54.000 Oc. decrease by 56.000 OD. dacrease by S11,400
Giant Company has firee products, A, B, and C. The following information is available Product A Product B ProductC Sales 567,000 590,000 53,000 521.000 Variable costs 40.000 11.000 Cantribution margin 27.000 37,000 10. 000 Fixod conts: Avoidetle 9,000 17,000 Unavoidable Operating income 4.000 7 400 S(1,400) 10,000 10,000 S8,000 510,000 Glant Company is thinking of dropping Product C because it is reporting a loss. Assuming Giant drops Praduct C and does NOT replace it operating income wil O A. Incraasa by $1.400 OB. increase by 54.000 Oc. decrease by 56.000 OD. dacrease by S11,400
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Giant Company has free products, A, B, and C. The fullowing information is available.
Product A
Product B Product C
590,000
53,000
Sales
567,000
521.000
Variable costs
40,000
11.000
Contribution margin
27 000
37,000
10.000
Fixod conts:
Avoidable
9,000
17,000
10,000
4.000
Unavaidable
10,000
7.400
Operating income
S8,000
S10,000
S(1,400)
Giant Company is thinking of dropping Product C because it is reporting a loss. Assuming Giant drops Product C and does NOT repiace it operating income wil,
O A. Incraasa by $1.400
B. increase by S54,000
OC. decrease by 56.000
OD. dacrease by $11,400
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