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What is the impact of this decision on triple play profit

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Question - Product P1 has a total contribution margin of $50,000. If Product P1 is dropped, $30,000 of fixed overhead costs can be eliminated. Some of the idle production equipment can be used to produce Product P9 which will increase its contribution margin by $25,000. The extra production will not change other fixed overhead costs. What is the impact of this decision on Triple Play's operating profit?

a. decrease by $5,000

b. decrease by $20,000

c. increase by $20,000

d. increase by $5,000

Reference no: EM132721735

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