Vineyard Industries Has Three Product Lines, A, B, and C

question 34

Multiple Choice

Vineyard Industries has three product lines, A, B, and C.The following information is available: $\begin{array}{lrrr}&A&B&C\\\text { Sales } & \$ 60,000 & \$ 90,000 & \$ 24,000 \\\text { Variable costs } & \underline{36,000} & \underline{48,000} & \underline{20,000} \\\text { Contribution margin } & \$ 24,000 & \$ 42,000 & \$ 4,000 \\\text { Fixed costs: } & & &\\\text { Avoidable } & 9,000 & 18,000 & 3,000 \\\text { Unavoidable } & \underline{6,000} & 9,000 & 2,400 \\\text { Operating income } & \$ 9,000 & \$ 15,000 & \$ 1,400) \end{array}$ Assuming Vineyard Industries can increase the selling price of product C to $30,000, all other information remaining constant, operating income will _____.

• A)increase $3,600
• B)decrease $3,600
• C)decrease $6,000
• D)increase $6,000