What effect will this have on operating? income

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Reference no: EM131216867

Black Productions has three? models: D,? E, and F. The following information is? available: Model D Model E Model F

Sales revenue ?$65,000 ?$33,000 ?$24,000

Variable expenses ?$32,000 ?$13,000 ?$14,000

Contribution margin ?$33,000 ?$20,000 ?$10,000

Fixed expenses ?$16,000 ?$16,000 ?$16,000

Operating income? (loss) ?$17,000 ?$4,000 ?$(6,000)

Black Productions is thinking of discontinuing model F because it is reporting an operating loss. All fixed costs are unavoidable. Black Productions discontinues model F and rents the space formerly used to produce product F for? $15,000 per? year, what effect will this have on operating? income?

Reference no: EM131216867

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