Business, 27.12.2020 16:40 jonathanvega424

The Draper Company is considering dropping its Doombug toy due to continuing losses. Revenue and costs data on the toy for the past year follow: Sales of 15,000 units $150,000 less Variable expenses $120,000 = Contribution margin $30,000 less Fixed expenses $40,000 = Net operating loss ($10,000) If the toy were discontinued, then Draper could avoid $8,000 per year in fixed costs. Under the given conditions, the change in annual operating income from discontinuing the production and sale of Doombugs would be: A. $30,000 decrease
B. $10,000 increase
C. $22,000 decrease
D. $18,000 increase

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The Draper Company is considering dropping its Doombug toy due to continuing losses. Revenue and cos...

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