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Question(s) / Instruction(s):

Accessibility Products Company has three models: D, E, and F. The following information is available: Model D Model E Model F Sales revenue $55,000 $35,000 $29,000 Variable expenses $32,000 $13,000 $14,000 Contribution margin $23,000 $22,000 $15,000 Fixed expenses $16,000 $16,000 $16,000 Operating income (loss) $7,000 $6,000 $(1,000) Accessibility Products Company is thinking of dropping model F because it is reporting an operating loss. All fixed costs are unavoidable. Assume Accessibility Products Company is able to increase the sale price of product F to $33,000 with no change in volume of units sold and no change in variable costs or fixed costs. What affect will this have on operating income? A. Increase $29,000 B. Increase $4,000 C. Decrease $29,000 D. Decrease $4,000

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