Your Company produces 5,000 units of Product X each year. Each unit of Product X sells for $8 and has a contribution margin of $5. Fixed costs are $30,000. If Product X is discontinued, $18,000 of fixed overhead would continue. As a result of discontinuing Product X, the company'soverall operating income would:O A. increase by $13,000O B. decreased by $13,000OC. decrease by $7,000O D. decreased by $25,000O E. increase by $7,000

Company may choose to discontinue a loss making or less profitable product after considering the…

Answered: result of discontinuing Product X, th

Business

Accounting

result of discontinuing Product X, th

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 14EB: Company A has current sales of $4,000,000 and a 45% contribution margin. Its fixed costs are...

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