Rings Company has three product lines, A, B, and C. The following financial information is available: Item Sales Variable costs Contribution margin. Fixed costs: Avoidable Unavoidable Pre-tax operating income Product Line A $ 54,000 $ 32,400 $ 21,600 $ 5,500 $4,200 $ 11,900 Product Line B $ 105,000 $ 56,000 $ 49,000 $ 15,000 $ 10,500 $ 23,500 Product Line C $ 24,000 $ 15,000 $9,000 $6,600 $ 3,200 $ (800) If Product Line C is discontinued and the manufacturing space formerly devoted to this line is rented for $6,000 per year, pre-tax operating income for the company will likely:

Rings Company has three product lines, A, B, and C. The following financial information is available: Item Sales Variable costs Contribution margin. Fixed costs: Avoidable Unavoidable Pre-tax operating income Product Line A $ 54,000 $ 32,400 $ 21,600 $ 5,500 $4,200 $ 11,900 Product Line B $ 105,000 $ 56,000 $ 49,000 $ 15,000 $ 10,500 $ 23,500 Product Line C $ 24,000 $ 15,000 $9,000 $6,600 $ 3,200 $ (800) If Product Line C is discontinued and the manufacturing space formerly devoted to this line is rented for $6,000 per year, pre-tax operating income for the company will likely:

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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