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 expenses charged to the product total $90,000 per year. The company estimates that $40,000 of these fixed expenses will not need to be paid if the product is dropped. These data indicate that if Product A is dropped, the company's overall net operating income would:
Group of answer choices
a. decrease by $60,000
b. increase by $20,000
c. decrease by $20,000
d. increase by $30,000
e. decrease by $10,000
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