beaver company a multi-product firm produces 5000, Cost Accounting

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beaver company a multi-product firm produces 5000

Beaver Company (a multi-product firm) produces 5,000 units of Product X each year. Each unit of Product X sells for $8 and has a contribution margin of $5. If Product X is discontinued, $18,000 of fixed overhead would be eliminated. As a result of discontinuing Product X, the company's overall operating income would:

A. Decreaseby $25,000
B. Increase by $43,000
C. Decrease by $7,000
D. Increase by $7,000

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Cost Accounting: beaver company a multi-product firm produces 5000

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