Reference no: EM132715674
Rambo Company has three products, A, B, and C. The following information is available:
Product A Product B Product C
Sales $60,000 $90,000 $24,000
Variable costs 36,000 48,000 15,000
Contribution margin 24,000 42,000 9,000
Fixed costs:
Avoidable 6,000 15,000 4,000
Unavoidable 7,000 9,000 5,400
Operating income $ 11,000 $18,000 $ (400)
Problem 1: Rambo Company is thinking of dropping Product C because it is reporting a loss. Assuming Rambo drops Product C and does NOT replace it, operating income will
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