Income statements for the most recent period for each product line are presented below:Product AProduct BProduct C Total$1,200$1,000$3,300-480-400-2,020= $720= $600= $1,280-550-820-200=$260Sales-Variable costs=Contribution margin-Common fixed costs-140-100=-$50$1,100O Dropping Product C will increase net operating income by $404O Dropping Product A will decrease net operating income by $550O Dropping Product B will increase net operating income by $50O Dropping Product B will decrease net operating income by $500-1.140= -$40-130-70= -$240-Direct fixed costs-30= Net Operating income = $550Which of the following statements is true about the effect of dropping a division?

Cost volume profit analysis is the technique used by management for decision-making. The methods…

Income statements for the most recent period for each product line are presented below: Product A Product B Product C Total $1,200 $1,000 $1,100 $3,300 -400 -1.140 -2,020 =$720 =$600 = -$40 = $1,280 -140 -550 -130 -820 -Direct fixed costs -30 -100 -70 -200 = Net Operating income = $550 =-$50 = -$240 =$260 Which of the following statements is true about the effect of dropping a division? Sales -Variable costs =Contribution margin -Common fixed costs -480 O Dropping Product C will increase net operating income by $40 4 Dropping Product A will decrease net operating income by $550 O Dropping Product B will increase net operating income by $50 Dropping Product B will decrease net operating income by $500

Income statements for the most recent period for each product line are presented below: Product A Product B Product C Total $1,200 $1,000 $1,100 $3,300 -400 -1.140 -2,020 =$720 =$600 = -$40 = $1,280 -140 -550 -130 -820 -Direct fixed costs -30 -100 -70 -200 = Net Operating income = $550 =-$50 = -$240 =$260 Which of the following statements is true about the effect of dropping a division? Sales -Variable costs =Contribution margin -Common fixed costs -480 O Dropping Product C will increase net operating income by $40 4 Dropping Product A will decrease net operating income by $550 O Dropping Product B will increase net operating income by $50 Dropping Product B will decrease net operating income by $500

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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