What will be the impact on operating profits

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Problem

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

Product	A	B	C	Total
Sales	$10,000	$30,000	$40,000	$80,000
Variable costs	5,000	20,000	45,000	70,000
Contribution Margin	5,000	10,000	-5,000	10,000
Fixed cost	5,000	15,000	30,000	50,000
Operating loss	0	-$ 5,000	-$35,000	-$40,000

Fixed costs are allocated common costs. Get the instant assignment help. If product line C is dropped, what will be the impact on operating profits?

Reference no: EM133973554

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