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

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 sales revenue 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?

A) Increase $11,000
B) Increase $24,000
C) Decrease $11,000
D) Decrease $24,000

Correct Answer:

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