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11. Kahn Company produces and sells 8,000 units of Product Zebra each year. Each unit of Product Zebra sells for $10 and has a contribution

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11. Kahn Company produces and sells 8,000 units of Product Zebra each year. Each unit of Product Zebra sells for $10 and has a contribution margin of $6. Kahn is considering dropping Product Zebra and wants to know what the effect will be on operating income. It is estimated that if Product Zebra is discontinued, $50,000 of the $60,000 in fixed costs charged to Product Zebra could be eliminated. These data indicate that if Product Zebra is discontinued, overall company operating income should: A) increase by $2,000 per year B) decrease by $2,000 per year C) increase by $38,000 per year D) decrease by $38,000 per year

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