Black Productions has three models: D, E, and F. The following information is available: Black Productions is thinking of discontinuing model F because it is reporting an operating loss. All fixed costs are unavoidable. Assuming Black Productions discontinues line F and is able to double the production and sales of model E without increasing fixed costs. What effect will this have on operating income?

Question

Black Productions has three models: D, E, and F. The following information is available:  Black Productions is thinking of discontinuing model F because it is reporting an operating loss. All fixed costs are unavoidable. Assuming Black Productions discontinues line F and is able to double the production and sales of model E without increasing fixed costs. What effect will this have on operating income?

Quizplus · Accepted Answer

The Answer of Black Productions has three models: D, E, and F. The following information is available:  Black Productions is thinking of discontinuing model F because it is reporting an operating loss. All fixed costs are unavoidable. Assuming Black Productions discontinues line F and is able to double the production and sales of model E without increasing fixed costs. What effect will this have on operating income?

Black Productions Has Three Models: D, E, and F