Riverside Industries has three product lines: A, B and C. The following informat

Question

Riverside Industries has three product lines: A, B and C. The following information is available: Product A Product B Product C Sales $100,000 $90,000 $44,000 Variable costs 76,000 48,000 35,000 Contribution margin 24,000 42,000 9,000 Avoidable fixed costs 9,000 18,000 3,000 Unavoidable fixed costs 6,000 9,000 7,700 Operating income (loss) $9,000 $15,000 $(1,700) Riverside Industries is thinking about dropping Product C because it is reporting a loss. Assume Riverside Industries drops Product C and does not replace it. What will happen to operating income? A) Increase $2,400 B) increase $600 C) decrease $9,000 D) decrease $6,00

Explanation / Answer

B) increase $600

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