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. Assume Black Productions is able to increase the sale price of product F to $35,000 with no change in volume of units sold and no change in variable costs or 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. Assume Black Productions is able to increase the sale price of product F to $35,000 with no change in volume of units sold and no change in variable costs or 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. Assume Black Productions is able to increase the sale price of product F to $35,000 with no change in volume of units sold and no change in variable costs or fixed costs. What effect will this have on operating income?

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