Riverside industries has threeproduct lines a b and c the, Ask an Expert

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Riverside Industries has threeproduct lines, A, B, and C. The following information isavailable:

A B C

Sales $100,000 $90,000 $44,000

Variablecosts 76,000 48,000 35,000

Contribution margin $24,000 $42,000 $9,000

Fixed costs:

Avoidable 9,000 18,000 3,000

Unavoidable 6,000 9,000 7,700

Operatingincome $9,000 $15,000 $(1,700)

Riverside Industries is thinking of dropping product line C because it is reporting a loss. Assuming Riverside drops line C and does not replace it, the operating income will _____.

A. increase by$2,400
B. increase by$600
C. decrease by$6,000
D. decrease by$9,000

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9796798

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