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Unformatted text preview: operating income (or loss) should be: A. $55,000 decrease B. $65,000 decrease C. $90,000 decrease D. $70,000 increase AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Learning Objective: 2 Level: Medium 69. Assume that discontinuing the Tam product would result in a $120,000 increase in the contribution margin of other product lines. How many Tams would have to be sold next year for the company to be as well off as if it just dropped the line and enjoyed the increase in contribution margin from other products? A. 5,000 units B. 6,000 units C. 6,500 units D. 7,000 units Contribution margin per Tam: $390,000 6,500 = $60 Sales of Tams to be as well off as if it dropped Tams: $30,000 $60 = 500 + 6,500 = 7,000 units...
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- Spring '11