Use the Following Information for the Next 3 Questions

question 98

Multiple Choice

Use the following information for the next 3 questions.
Ricardo Company has three products, A, B, and C. The following information is available:
-Suppose that eliminating Product C will free up warehouse space for Product A's use, and will reduce the avoidable fixed costs of Product A by $1,500. If Ricardo drops Product C, then operating income will

• A) Increase by $3,700
• B) Decrease by $14,500
• C) Decrease by $8,300
• D) Decrease by $2,500

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