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Business, 22.04.2021 01:00 briarkaltvedt

A company has two different products that are sold in different markets. Financial data are as​ follows: Product A

Product B

Total
Revenue

​$16,000

​$9,300

​$25,300
Variable cost

​(8,000)

​(9,800)

​(17,800)
Fixed cost​ (allocated)

​(2,000)

​(2,100)

​(4,100)
Operating income​ (loss)

​$6,000

​$(2,600)

​$3,400
Assume that fixed costs are all unavoidable and that dropping one product would not impact sales of the other. If Product B is​ dropped, what would be the impact on total operating income of the​ company?
A.
decreases by​ $2,100
B.
increases by​ $500
C.
increases by​ $2,100
D.
decreases by​ $500

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Answers: 3

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