Black Productions is thinking of discontinuing model F because it is reporting a
ID: 2380287 • Letter: B
Question
Black Productions is thinking of discontinuing model F because it is reporting an operating loss. All fixed costs are unavoidable. If Black Productions discontinues model F and rents the space formerly used to produce product F for $15,000 per year, would total operating income increase or decrease and by what amount?
Black Productions is thinking of discontinuing model F because it is reporting an operating loss. All fixed costs are unavoidable. If Black Productions discontinues model F and rents the space formerly used to produce product F for $15,000 per year, would total operating income increase or decrease and by what amount?Explanation / Answer
Operating income ir nothing but the profit we obtain for the product .so thus sales or the revenue of the product must be given in order to find the operating income. The formula to find operating income = cost at which it is sold -actual sale prize of product.
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