A study has been conducted to determine if Product A should be dropped . Total...
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Accounting
A study has been conducted to determine if Product A should be dropped . Total sales of the product are $ 200,000 per year; total variable expenses are $140,000 per year . Total fixed expenses charged to the product are $ 90,000 per year . The company estimates that $40,000 of these fixed expenses will continue even if the product is dropped . These data indicate that if Product A is dropped , the company's overall operating income per year would change by how much? a ) A decrease of $10,000 . b ) An increase of $20,000 c) A decrease of $20,000 . d ) An increase of $30,000 .
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