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28 Lake Company manufactures golf clubs in three models. For the year, the Beaver line has a net loss of $10,000 from sales $200,000, variable
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Lake Company manufactures golf clubs in three models. For the year, the Beaver line has a net loss of $10,000 from sales $200,000, variable costs $180,000, and fixed costs $30,000. If the Beaver line is eliminated, $20,000 of fixed costs will remain. The Beaver line be A) continued because $10,000 of contribution margin will not be realized if the line is eliminated: this amount is greater than the $10,000 savings of fixed costs B) continued because $10,000 of contribution margin will not be realized if the line is eliminated: this amount is greater than the $20,000 savings of fixed costs C) continued because $20,000 of contribution margin will not be realized if the line is eliminated: this amount is greater than the $10,000 savings of fixed costs D) discontinued: the Beaver line has a net loss of $10,000 E) none of the aboveStep by Step Solution
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