Eagan Company Has Three Product Lines, A, B and C

question 71

Multiple Choice

Eagan Company has three product lines, A, B and C. The following information is available:

-Assume that product line B is discontinued and replaced with product line C. This will triple the production and sales of product line C without increasing fixed costs. Operating income will

• A) increase $2,000.
• B) increase $6,000.
• C) decrease $2,000.
• D) not change.

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