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2. Shine Bright Company has three product lines-D, E, and F. The following information is available: Sales Variable costs Contribution margin Fixed expenses Operating income
2. Shine Bright Company has three product lines-D, E, and F. The following information is available: Sales Variable costs Contribution margin Fixed expenses Operating income (loss) D E F $60,000 $38,000 36,000 18,000 $26,000 12,000 24,000 20,000 14,000 12,000 15.000 16,000 $12,000 $5,000 $(2,000) Shine Bright Company is thinking of dropping product line F because it is reporting an operating loss. Assuming fixed costs are unavoidable, if Shine Bright Company drops product line F and can use the space formerly used to produce product F to generate $17,000 of net income per year, what effect will this have on operating income? Should they drop Product F? **Show your work to support your
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