Donnelly Company has three products, R2, R4, and R2D2. The following information is available:
-Assuming Product R2D2 is discontinued and the space formerly used to produce the product is rented for $6,000 per year,operating income will:
A)increase by $3,300.
B)increase by $4,500.
C)increase by $6,000.
D)increase by $7,200.

Question

Donnelly Company has three products, R2, R4, and R2D2. The following information is available: 
-Assuming Product R2D2 is discontinued and the space formerly used to produce the product is rented for $6,000 per year,operating income will:
A)increase by $3,300. 
B)increase by $4,500. 
C)increase by $6,000. 
D)increase by $7,200.

Quizplus · Accepted Answer

B)$(1,500)+ $6,000 = $4,500

Donnelly Company Has Three Products, R2, R4, and R2D2