ABC Company has three products that use common facilities.The relevant data concerning these three products follows:

Fixed costs are allocated common costs.If product line C is dropped,what will be the impact on operating profits?
A)Operating loss will decrease to ($15,000).
B)Operating loss will decrease to ($5,000).
C)Operating loss will increase to ($35,000).
D)There would be no change in operating profits.

Question

ABC Company has three products that use common facilities.The relevant data concerning these three products follows:

Fixed costs are allocated common costs.If product line C is dropped,what will be the impact on operating profits?
A)Operating loss will decrease to ($15,000). 
B)Operating loss will decrease to ($5,000). 
C)Operating loss will increase to ($35,000). 
D)There would be no change in operating profits.

Quizplus · Accepted Answer

The Answer of ABC Company has three products that use common facilities.The relevant data concerning these three products follows:

Fixed costs are allocated common costs.If product line C is dropped,what will be the impact on operating profits?
A)Operating loss will decrease to ($15,000). 
B)Operating loss will decrease to ($5,000). 
C)Operating loss will increase to ($35,000). 
D)There would be no change in operating profits.

ABC Company Has Three Products That Use Common Facilities