Response to the following problem:
Langer Company has three products (A, B, and C) that use common facilities. The relevant data concerning these three products follow.
A B C Total
Sales: $ 10000 $30000 $40000 $80000
Variable cost: $ 5000 $20000 $25000 $50000
Contribution margin: $5000 $10000 $15000 $30000
Fixed cost $5000 $15000 $30000 $50000
Operating cost: $0 $(5000) $(15000) $(20000)
Required:
If fixed cost allocated to product line C are not avoidable and if product line C dropped, what will be the impact on income?