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17. Alta Loma Industries has three product lines, A, B, and C. The following information is available: Sales A B $100,000 $90,000 C Variable costs

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17. Alta Loma Industries has three product lines, A, B, and C. The following information is available: Sales A B $100,000 $90,000 C Variable costs $36,000 76,000 48,000 Contribution margin 27.000 $24,000 $42,000 Traceable fixed costs $9,000 9,000 27.000 Segment margin 3,000 $15,000 $15,000 Common fixed costs (allocated) $6,000 6,000 9.000 Operating income 8,400 $9,000 $6.000 $(2,400) The company thinks it can eliminate product line C and double its production and sales of product line B. There is enough capacity to double the production and sales of product line B without increasing the current fixed costs. If these changes are made, the total operating income of Alta Loma Industries will increase by how much? a. $18,000 b. $42,000 c. $24,000 d. $19,000 e. $36,000

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