Mairy Productions has three models: D, E, and F. The following information is availableModel D100.000$37,000$32,000$20.000$12,000Sales revenueVariable expensesContribution marginFixed expensesOperating income (loss)Model E$37,000$14,000$23.000$20,000$3,000A. Increase $13,000OB. Decrease $13,000OC. Increase $18,000OD. Decrease $18,000Model F$24,000$14.000$10,000$20,000($10,000)Maizy Productions is thinking of discontinuing model F because it is reporting an operating loss. All fixed costs are unavoidable. Assuming Maizy Productions discontinues fine F and is able to doublethe production and sales of model E without increasing fixed costs. What effect will this have on operating income?

Lets understand the basics. When choice is required between whether to continue operation of product…

Mairy Productions has three models: D, E, and F. The following information is be Model D 500,000 $37,000 $32.000 $20.000 $12,000 Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Model E $37,000 $14.000 $23,000 $20,000 $3,000 A. Increase $13,000 OB. Decrease $13,000 OC. Increase $18,000 OD. Decrease $18.000 Model F 124.000 $14.000 $10.000 $20,000 ($10,000) Maizy Productions is thinking of discontinuing model F because it is reporting an operating loss. Al fixed costs are unavoidable. Assuming Mairy Productions discontinues ine F and is able to double the production and sales of model E without increasing fixed costs. What effect will this have on operating income?

Mairy Productions has three models: D, E, and F. The following information is be Model D 500,000 $37,000 $32.000 $20.000 $12,000 Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Model E $37,000 $14.000 $23,000 $20,000 $3,000 A. Increase $13,000 OB. Decrease $13,000 OC. Increase $18,000 OD. Decrease $18.000 Model F 124.000 $14.000 $10.000 $20,000 ($10,000) Maizy Productions is thinking of discontinuing model F because it is reporting an operating loss. Al fixed costs are unavoidable. Assuming Mairy Productions discontinues ine F and is able to double the production and sales of model E without increasing fixed costs. What effect will this have on operating income?

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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