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What will be the impact on income - increase or decrease

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Question - Langer Company has three products (A, B, and C) that use common facilities. The relevant data concerning these three products follow.  

 

A

B

C

Total

Sales

$10,000

$30,000

$40,000

$80,000

Variable costs

5,000

20,000

25,000

50,000

Contribution margin

$5,000

$10,000

$15,000

$30,000

Fixed costs

5,000

15,000

30,000

50,000

Operating loss

$0

$(5,000)

$(15,000)

$(20,000)

Required - If fixed costs allocated to product line C are not avoidable and if product line C is dropped, what will be the impact on income?  Will it increase or decrease?

Reference no: EM131832193

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