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30) Alpha is considering eliminating Model AE2 from its camera line. Recent info for Model AE2 is below: Sales (1,000 units) Manufacturing costs: $300,000
30) Alpha is considering eliminating Model AE2 from its camera line. Recent info for Model AE2 is below: Sales (1,000 units) Manufacturing costs: $300,000 -Direct materials 150,000 Direct labor ($15 per hour) 60,000 Overhead 100.000 Operating loss ($10,000) Overhead costs are 70% variable and the remaining 30% are fixed and unavoidable. If Model AE2 is dropped from the product line, what will be the effect on operating income? (please list dollar value and the direction of the change in operating income).
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