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2. Use the information below to answer the following question(s): The income statement for Champion Parts is divided by its two product lines, Part L2 and Part C6, as follows: 26) If Champion Parts can eliminate fixed costs of $40,000 and increase the sale of Part L2 by 3,000 units at a selling price of $30 per unit and a contribution margin of $4 per unit, then dropping the Part C6 should result in which of the following? A) Increase in total operating income of $13,000 B) Increase in total operating income of $53,000 C) Decrease in total operating income of $13,000 D) Decrease in total operating income of $53,000 3) The internal financial statements of Pierce Solutions show that their product, L.X9, incurred an operating loss in the most recent year. There were 20,000 units of LX90 sold in that year. Selected financial information about product L.X 90 follows. If product LX90 were to be dropped, the company would avoid $16,000 in fixed costs per year. i) If Pierce Solutions were to drop product LX90, the change in annual operating income would be a(n) A) decrease in total operating income of $26,000. B) decrease in total operating income of $44,000. C) increase in total operating income of $10,000. D) decrease in total operating income of $10,000

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