A study has been conducted to determine if Product A should be dropped. Sales of...
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Accounting
A study has been conducted to determine if Product A should be dropped. Sales of the product total $200,000 per year; variable expenses total $140,000 per year. Fixed cost charged to the product total $90,000 per year. The company estimates that $65,000 of these fixed costs can be avoided if the product is dropped .These data indicate that if Product A is dropped, the contribution margin lost will equal:
Select one:
a. $110,000
b. $60,000
c. $65,000
d. $135,000
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